• Implied Value per Stratasys Share of $24.07, Based on July 12th Closing Price, Representing a 62% Premium to Stratasys Undisturbed Share Price on May 24, 2023

• Implied Value of approximately $28 per Share and approximately $2 Billion in Total Value, Inclusive of $100 Million in Cost Synergies

• Meaningfully Improves Initial Offer by ~15% and Increases Stratasys Ownership in Combined Company to approximately 44%

• Delivers Executed Merger Agreement in Escrow and Commits to Pay Termination Fees to Desktop Metal on Behalf of Stratasys

• Superior Proposal Presents Opportunity for Stratasys Board to Commence Discussions with 3D Systems
  

ROCK HILL, S.C., July 13, 2023 (GLOBE NEWSWIRE) -- 3D Systems (NYSE:DDD) (“the Company”) today announced an enhanced, binding offer to combine with Stratasys Ltd. (NASDAQ: SSYS) (“Stratasys”). Each Stratasys share will convert into $7.50 in cash and 1.5444 shares of the combined company, representing ownership by the Stratasys shareholders, in the aggregate, of approximately 44% of the shares of the combined company, in addition to the approximately $540 million of aggregate cash consideration being offered.

The binding offer by 3D Systems represents compelling value for Stratasys shareholders by any measure:

• Implied value per Stratasys share of $24.07, based on 3D Systems July 12, 2023 closing share price, representing a 62% premium to the closing price per Stratasys share on May 24, 2023, the last trading day prior to the announcement of the proposed transaction by Stratasys with Desktop Metal.
• Implied value of approximately $28 per Stratasys share, or an approximately 80% premium, inclusive of $100 million of mutually identified and agreed upon cost synergies.¹
• Represents a ~15% improvement to 3D Systems’ proposal submitted to the Stratasys Board on May 30, 2023.
  

President and CEO Dr. Jeffrey Graves stated, “We have continued to pursue a friendly combination with Stratasys with the objective of maximizing value for the shareholders of both companies. Multiple large Stratasys shareholders have reached out to inform us that they believe a combination of 3D Systems and Stratasys is the right path forward. This feedback affirms our conviction that we are doing right by shareholders today by offering exceptional value, certainty and transparency, and agreeing to pick up the termination fee that will be payable to Desktop Metal.”

Dr. Graves continued, “We have taken every step to improve the value, certainty and transparency of our proposal and look forward to constructively engaging with the Stratasys Board so that we can mutually pursue a transaction that will change the landscape of the additive manufacturing industry for the benefit of not only investors, but also employees and customers. We are taking this decisive action now to remove any reasonable doubt whether 3D Systems’ offer is likely to result in a superior proposal. While we believe our previous offers should have constituted a superior proposal, we are confident that this enhanced offer and signed merger agreement unequivocally constitutes a superior proposal to any other before Stratasys.”

Concurrently with the announcement of this binding offer, 3D Systems has delivered to Stratasys a signed merger agreement in escrow. This merger agreement, which lays out the details of the merger and, as required, will be filed on Form 8-K with the SEC by 3D Systems, now awaits countersignature by Stratasys.

The terms outlined in 3D Systems’ merger agreement, including the representations, warranties, covenants, closing conditions and termination rights, were designed to track those in the Desktop Metal merger agreement in order to offer Stratasys and its shareholders at least as much certainty as the Desktop Metal transaction. These terms include:

• 3D Systems Picks Up the Desktop Metal Termination Fees: 3D Systems will pay, on behalf of Stratasys, the full amount of any termination fees owing to Desktop Metal, as a result of the failure to obtain Stratasys’ shareholder approval of such agreement and as a result of the entrance by Stratasys into the merger agreement with 3D Systems.
• No Financing Condition: 3D Systems will fund the cash consideration from the pro forma balance sheet of the combined company and, as such, the proposed merger is not subject to any debt or equity financing condition.
• Right to Elect Form of Consideration: Each Stratasys shareholder will have the right to elect to receive its preferred mix of cash and stock consideration, subject to the shareholder-friendly election, cap and proration mechanisms.
• Advantageous tax and capital markets structure: Stratasys shareholders will receive shares of a Delaware-incorporated, domestic SEC registrant. This transition away from holding shares of a foreign private issuer will result in their holding shares in an issuer with access to a significantly broader capital markets base. Moreover, while Stratasys shareholders will need to consult with their own tax advisors, this structure will generally enable Stratasys shareholders to receive the share consideration on a tax-free basis.
• Regulatory Clearance Certainty with No CFIUS Risks: 3D Systems is confident that all applicable regulatory clearances will be obtained and therefore makes a strong commitment to obtain requisite regulatory clearances. In addition, in contrast to the proposed Desktop Metal merger, no CFIUS approval is required for the proposed combination of Stratasys and 3D Systems.
• Removal of Unusual Desktop Metal Terms: The Desktop Metal merger agreement contains unusual terms, including a requirement for a number of existing contracts of Desktop Metal to be modified or terminated in advance of closing, a provision for the payment of a termination fee of $19 million by Stratasys to Desktop Metal if these contracts are not modified or terminated, and a provision that the Desktop Metal merger agreement may be terminated if a shareholder were to hold more than 50% of either company. The merger agreement with 3D Systems has no such contingencies hanging over the pathway of the shareholders of both companies to realize superior value upon consummation.
• Right of Stratasys to Terminate to Accept a Superior Proposal: In contrast to the Desktop Metal merger agreement, Stratasys will have the right to terminate this merger agreement to enter into a superior proposal, ensuring that the shareholders of Stratasys are able to receive, at the end of the day, the best value attainable for their shares.
  

The Company reiterates its view of the key benefits of its proposed transaction with Stratasys:

• Scale Drives Leadership: Delivers immediate scale for leadership in the rapidly growing and fragmented additive manufacturing industry.
• Complementary Technology Portfolio: Combination of proven technologies with limited overlap, creating a combined portfolio better positioned to service nearly every vertical in the 3D printing market today.
• Significant Cost Synergies: Highly certain value creation potential through realization of at least $100 million in cost synergies across SG&A savings, R&D integration and COGS optimization, jointly identified by members of both companies’ management teams during due diligence sessions in September 2022, in addition to significant revenue opportunities not currently included in 3D Systems’ pro forma valuation analysis.
• Industry Leading Financial Profile: Estimated LTM combined revenue of $1.2 billion and ~12% EBITDA margin², and no debt or equity financing contemplated.
• Meaningful Growth Opportunities from Regenerative Medicine: Unmatched bioprinting leadership potential, with a clear road map for human applications, including human trials for 3D printed lungs anticipated by 2026.
  

Goldman Sachs & Co. LLC is acting as exclusive financial advisor and Freshfields Bruckhaus Deringer (US) LLP, together with Herzog, Fox & Neeman in Israel, is acting as legal counsel to 3D Systems.

For accompanying slides, please visit the Company’s website.

About 3D Systems

More than 35 years ago, 3D Systems brought the innovation of 3D printing to the manufacturing industry. Today, as the leading additive manufacturing solutions partner, we bring innovation, performance, and reliability to every interaction – empowering our customers to create products and business models never before possible. Thanks to our unique offering of hardware, software, materials, and services, each application-specific solution is powered by the expertise of our application engineers who collaborate with customers to transform how they deliver their products and services. 3D Systems’ solutions address a variety of advanced applications in healthcare and industrial markets such as medical and dental, aerospace & defense, automotive, and durable goods. More information on the company is available at www.3DSystems.com .