Stratasys has introduced the submitting of a proxy assertion with the U.S. Securities and Alternate Fee in reference to its 2023 Annual Common Assembly of shareholders, which is scheduled to be held on August 8, 2023. The corporate has additionally issued a letter to its shareholders concerning the particular tender provide from Nano Dimension in reference to the proxy assertion.
Stratasys’ letter to shareholders highlights the corporate’s document of ‘robust efficiency’ and its ‘technique for worth creation’. Stratasys is recommending that its shareholders vote for the re-election of the Stratasys slate, consisting of eight present members of the Stratasys Board.
The complete textual content of the letter is beneath:
Expensive Stratasys Shareholder,
With a successful technique for worthwhile progress, a extremely skilled administration workforce and a purpose-built Board of Administrators, Stratasys is properly positioned to create worth within the close to, mid and long run.
Stratasys is efficiently executing its “North Star” technique, shifting to stronger and extra worthwhile progress whereas increasing into new applied sciences, verticals and revolutionary use instances for its main polymer capabilities and broad portfolio of options. As well as, our proposed mixture with Desktop Steel, Inc., which we anticipate to be put to a shareholder vote later this yr, will speed up our mission of main additive manufacturing into mass manufacturing. The mix will create a next-generation additive manufacturing firm with enhanced progress and profitability, and is anticipated to generate greater than $1.6 billion of income and greater than $300 million of EBITDA in 2026 at base case.
Nano’s Self-Serving Marketing campaign Dangers Derailing Future Progress Alternatives
We strongly imagine the extremely opportunistic, self-interested marketing campaign by Nano Dimension Ltd. (“Nano”) to take management of Stratasys places your funding in danger by threatening to derail our important progress, dismantle Stratasys’ proposed mixture with Desktop Steel and destroy worth for Stratasys shareholders. The Stratasys Board has not modified its unanimous approval, suggestion and declaration of advisability of the Desktop Steel transaction.
If Nano’s slate is elected, Nano would be capable of accomplish its objective of buying management of Stratasys with out paying Stratasys shareholders or closing the tender provide. To be clear, the election of Nano’s slate wouldn’t robotically outcome within the closing of Nano’s partial tender provide, which is topic to numerous circumstances which might be unlikely to be fulfilled by both the at the moment proposed expiration date of Nano’s partial tender provide, or the date of the Stratasys Annual Common Assembly.
Forward of the Stratasys Annual Common Assembly on Tuesday, August 8, 2023, we urge you to vote “FOR” the re-election of the Stratasys slate consisting of the eight extremely certified present members of Stratasys’ Board.
Nano’s Slate of Insider Candidates for the Stratasys Board is Unqualified and Its Marketing campaign to Take Management of Stratasys is Constructed on Serving the Pursuits of Nano
Nano has nominated an unqualified slate of director candidates in an try to seize management of Stratasys. Six of its seven nominees for the Stratasys Board are present Nano executives, together with its CEO Yoav Stern, which means that there could be important conflicts of curiosity between their roles at Nano and their roles as administrators of Stratasys. How might a board consisting of executives of one other participant within the additive manufacturing business, 5 of whom report back to Mr. Stern, be trusted to behave independently and within the pursuits of all Stratasys shareholders?
Solely two Nano nominees have served on a public firm board over almost the final 20 years, and a lot of the nominees lack expertise operating 3D printing firms, in addition to firms which might be of a comparable scale to Stratasys.
Nano’s marketing campaign is an try to distract its personal shareholders from its failing enterprise mannequin, its observe document of worth destruction and its underwhelming working outcomes. It’s no shock that Nano has nominated six of its personal executives for the Stratasys Board. Nano’s – and Mr. Stern’s – historical past of company governance and administration failings and blatant lack of regard for its personal shareholders contains:
- Beneath the management of Nano’s nominees, Nano is buying and selling at a major low cost to the worth of its money and tradable securities, reflecting Nano shareholders’ insecurity within the means of Nano’s administration, and consequently the Nano nominees, to create shareholder worth.
- Nano’s enterprise continues to burn important money, together with almost $28 million in internet money utilized in operations within the first quarter of 2023. Whereas Nano reported internet earnings of greater than $22 million within the quarter, its funding in Stratasys generated greater than $40 million of income in that point, which means its enterprise generates important losses, as mirrored by their adverse $23.7 million of adjusted EBITDA within the first quarter.
- In line with the suggestions of all three main, unbiased proxy advisory companies, Nano’s personal shareholders voted to take away 4 members of Nano’s Board and appoint two new members of their place at a particular assembly on March 20, 2023, a undeniable fact that Nano’s management refuses to simply accept and which they’re now battling in an Israeli court docket. In consequence, the legality and authority of Nano’s Board and administration workforce proceed to be in query.
- Nano pursues worth damaging acquisitions to keep away from returning money to shareholders (e.g., DeepCube, NanoFabrica). The acquisitions they made in 2021 and 2022 value Nano tons of of thousands and thousands of {dollars}, and but Nano needed to write off the worth of those acquired companies the identical yr they have been acquired.
- Nano doesn’t disclose the voting outcomes of its director elections and adjustments classification of administrators to keep away from dealing with shareholder votes. Additional, Nano’s categorised Board with three-year phrases limits the flexibility of shareholders to carry the Board accountable for efficiency.
- The Nano Board supposed to reprice Mr. Stern’s severely out-of-the-money choices, which proxy advisory agency Glass Lewis described as “extreme compensation” and which shareholders voted down on the particular assembly in December 2022.1
- The election of Nano’s slate of nominees would take Stratasys out of compliance with the Nasdaq requirement {that a} majority of the board of administrators be unbiased. Election of Nano’s slate would additionally make Stratasys non-compliant with the Securities and Alternate Fee and Nasdaq audit and compensation committee company governance guidelines.
Bear in mind: Mr. Stern’s damaging habits is nothing new. Mr. Stern was eliminated as interim president and CEO of Magal Safety Techniques (“Magal”) in 2009 after inflicting what Magal described as “an nearly irreparable injury within the morale of the remaining workers” who “operated in a hostile setting and have been terrified by his managerial type.”2 In a letter to shareholders concerning a problem led by Mr. Stern to Magal’s Board, Magal additional famous that “After Mr. Stern joined the Firm, he clearly indicated to sure workers that his actual intention was to trigger a administration buy-out the place the shares of the Firm could be bought at a low value by administration.”3 Mr. Stern additionally reportedly tried to extort Magal’s largest shareholder with a view to stop him from voting on the shareholder assembly on Mr. Stern’s board problem.4
Thanks to your help.
The Stratasys Board of Administrators
The letter may also be discovered right here.
On July 10, 2023, Nano Dimension elevated the value of its particular tender provide from 20.05 USD per share to 24.00 USD per share. Stratasys responded the identical day with a press release saying it should evaluation and consider the revised provide to find out a plan of action in the very best pursuits of the corporate and its shareholders, and stated it suggested shareholders to take no motion at the moment, and would inform them of the Board’s place concerning the provide inside ten enterprise days.
Learn extra:
Nano Dimension submits new Stratasys provide of $24 per share in money; Stratasys to evaluation
Stratasys shareholder Donerail Group LP expresses concern over Desktop Steel merger in open letter
Defined: The ability wrestle at Nano Dimension
