The Donerail Group urges Stratasys to ‘move past inferior Desktop Metal deal’

The Donerail Group, a large shareholder of Stratasys (SSYS), with a beneficial ownership interest of approximately 2.3% of the company’s outstanding shares, released the following letter to Stratasys’ Board of Directors. “As you are aware, The Donerail Group is a large shareholder of Stratasys with a beneficial ownership interest of approximately 2.3% of the company’s outstanding shares. Since our public letter was released on June 29th, in which we detailed our considerations regarding the strategic alternatives available for Stratasys stakeholders, we have observed overwhelming feedback from existing Stratasys shareholders that support our letter. Notwithstanding the overwhelming support that we have received, we watched with great interest the improved terms offered by 3D Systems (DDD) this week to acquire Stratasys, whereby 3D Systems has now offered $24.07 in cash and stock per share to Stratasys shareholders. We are encouraged that 3D Systems has improved their offer on the back of our letter and recognizes the intrinsic value that exists at Stratasys. Meanwhile, Nano Dimension (NNDM), the company’s largest shareholder, continues to try and meaningfully increase its existing ownership in Stratasys, announcing just days ago its intent to more than triple its ownership in the company with a willingness to pay $24.00 per share in cash to existing holders to do so. While a partial tender for shares offers certain complexity to SSYS shareholders, Nano also indicated that it could merge with 3D Systems if its partial tender is successful, an action that has the potential to deliver significant value to SSYS shareholders and that we support. These revised and improved offers each stand at nearly a 70% premium to the closing Stratasys share price of $14.26 per share on May 25th, the first trading day after the market had time to digest the Company’s merger announcement with Desktop Metal (DM). Critically, the revised offer from 3D Systems is binding, removing a meaningful amount of risk for Stratasys shareholders. Based on our understanding of the situation, the 3D Systems agreement can be quickly executed, which, in addition to the premium offered, surely demonstrates this proposal is reasonable likely to lead to a superior proposal to the Desktop Metal transaction. As it stands, multiple proposals exist that value SSYS stock at a nearly 70% premium to the Stratasys share price following the Desktop Metal news. Given these important developments, we would encourage and expect the Stratasys Board of Directors to move past the inferior Desktop Metal deal and swiftly engage with interested parties to negotiate the best possible deal for SSYS shareholders.”