Stratasys Inc., a 3-D printer manufacturer, said Monday that it intends to combine with privately held Objet Ltd. in a deal that values the Israel-based target at about $700 million.
Terms of the deal call for Eden Prairie, Minn.-based Stratasys to merge with a subsidiary of Objet under the Stratasys Ltd. name, with Stratasys shareholders receiving one share of the combined entity for each share they own. The combined company would have an equity value of about $1.4 billion, with Stratasys owners holding about 55% of the new company's stock.
Stratasys had a market valuation of about $766 million as of Friday.
Both Stratasys and Rehovot-based Objet make 3-D printers used by manufacturers and designers for rapid prototyping, and the companies in a statement said that the deal would create an entity with the scale needed to offer a range of options to a geographically diverse client base.
"Today marks a significant milestone for Stratasys and an important development for the 3-D printing and direct digital manufacturing industry," Stratasys co-founder, chairman and CEO Scott Crump said in a statement. "Together we will have a broader and more comprehensive product and technology portfolio, and the resources, team and financial strength to achieve our goals."
Post-deal, Crump would chair the combined company's board, with Objet chairman Elchanan Jaglom chairing the board's executive committee and Objet CEO David Reis becoming chief executive of the combination.
Stratasys also adopted a limited duration shareholder rights agreement, or poison pill, exercisable if anyone becomes the beneficial owner of 10% or more of its stock in an effort to block unsolicited suitors while it and Object complete their deal. The rights plan calls for Stratasys to distribute a dividend of one common share purchase right on each outstanding common share.
Stratasys was advised by Piper Jaffray & Co., which also provided a fairness opinion on the exchange ratio. It received legal counsel from a Latham & Watkins LLP team led by Bruce Prager and Howard Rosenblatt and including Virginia Tent, Jason Hegt and Tomas Nilsson; as well as McLaughlin & Stern LLP; Richards, Layton & Finger PA; and Fischer Behar Chen Well Orion & Co. J.P. Morgan Securities LLC acted as financial adviser to Objet, with Meitar Liquornik Geva & Leshem Brandwein and Cooley LLP providing legal counsel.