Nano Dimension to Acquire Markforged

Nano Dimension Ltd. and Markforged Holding Corporation jointly announced that they have entered into a definitive agreement pursuant to which Nano Dimension will acquire all outstanding shares of Markforged in an all-cash transaction for $5.00 per share.

In acquiring Markforged, Nano Dimension is acquiring a company with scale and efficiency. Markforged’s 2023 revenue was $93.8 million with a 47.4% gross margin and 48.6% non-GAAP gross margin, and a second quarter of 2024 gross margin of 48.3% and non-GAAP gross margin of 51.9%, with potential to expand further.

The combined company post-closing, including both Desktop Metal and Markforged, is expected to have a strong balance sheet with a total expected cash and cash equivalents, which includes marketable securities, of $475 million.

Nano Dimension is poised to lead the industry with its July 3, 2024 announced agreement to acquire Desktop Metal, Inc., and the Markforged acquisition is expected to further expand Nano Dimension’s leadership in AM.

The combined Nano Dimension-Desktop Metal company would have a revenue based on fiscal year 2023 of $246 million and, as of today’s announcement, the combined company – Nano Dimension, Desktop Metal, and now Markforged – would have a combined revenue based on fiscal year 2023 of $340 million, along with a clear path to profitability.

The aggregate total consideration payable to Markforged’s shareholders is $115 million. This is based on $5.00 per share, which represents a 71.8% premium to Markforged’s Sept. 24, 2024 VWAP and a 67.8% premium to Markforged’s 90 day VWAP as of Sept. 24, 2024.

As of June 30, 2024, Markforged had cash and cash equivalents, including restricted cash, of $93.9 million. Restricted cash includes $19.1 million to cover certain liabilities associated with the Continuous Composites lawsuit.

“In combining with Markforged, Nano Dimension is taking bold action in its journey towards becoming a digital manufacturing CEO and member of the board of directors of Nano Dimension, said. “Markforged is an exceptional company with innovative AM materials and solutions for true production. Their prowess is validated by their more than 15,000 installed and connected systems in the field with many leading names across key industry verticals. I am excited to work with Shai Terem and his team, who have done an exceptional job developing their cutting-edge solutions.

“This is all the more substantial when we think about the anticipated closing of our deal with Desktop Metal. We believe the combination of Nano Dimension, Desktop Metal, and Markforged further strengthens our unique opportunity in creating value for our shareholders, customers, and employees as we work to deliver profitable growth, exceptional services, and notable career development opportunities.”

“We’re excited to bring together our pioneering, complementary product portfolios that will further enhance our ability to serve our customers in high-growth industries with a more complete offering of highly innovative solutions used on the factory floor,” Terem, CEO, president, and member of the board of directors of Markfoged, added. “Not only is our product offering unique, but together we will have the scale and balance sheet strength to become an even more trusted partner to our customers, who are leaders across several industries. We look forward to working with Nano Dimension to join great companies and their devoted teams that can serve our stakeholders to the maximum extent possible.”

Compelling Strategic and Financial Benefits

• Expansion of Nano Dimension’s product portfolio to include fused filament fabrication (FFF) for high performance applications – which Nano Dimension believes will create the most comprehensive set of solutions expected to drive future growth: The transaction will combine the strengths of the respective company offerings, which Nano Dimension believes will bring customers the most complete set of AM solutions in terms of printing technologies and materials, especially those that are aligned with the high growth segments of the industry.

Customers will find solutions from FFF to binder jetting to digital light processing to additive inkjet, all across a range of materials, and complemented with sophisticated software. Altogether, customers will realize the manufacturing solutions they need for unrivalled design-to-manufacturing at scale.

• Fosters leadership in Metal-AM – widely considered the greatest growth driver in the industry: Fundamental tailwinds within the AM industry are expected to result in further growth whereby metal focused AM is expected to be the clear leader. Nano Dimension secured a promising foothold in Metal-AM with its agreement to acquire Desktop Metal; that foothold would be widened and deepened with Markforged.

• Builds around strategic focus on sophisticated materials that are core to high performance applications: Those familiar with the AM industry consistently articulate that a focus on materials is vital to delivering solutions that make applications for use as end-parts. On this, the combined company exemplifies a materials-oriented organization. Nano Dimension’s existing strength in the materials domain will be brought to new heights with Markforged’s proven know-how in composite materials, specifically continuous fiber reinforcement.

Completing the transaction is subject to certain closing conditions, including the approval of Markforged’s stockholders, and required regulatory approvals.

The transaction, which was unanimously approved by the Boards of Directors of both companies, is expected to close in the first quarter of 2025, subject to the satisfaction of customary closing conditions, including those described above.