3d Systems Corporation · NYSE:DDD
3d Systems — Merger or Acquisition (June 2023)
39 slides from 3d Systems's merger presentation, Jun 27, 2023
Slide 1: Building a Global Leader in Additive Manufacturing
+ •Cover style Building a Global Leader in Additive Manufacturing JUNE 27, 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements made in this document that are not statements of reflected or predicted in forward-looking statements. In particular, we note historical or current facts are forward-looking statements within the that there is no assurance that a definitive agreement for
Slide 3: Additional Information
Additional Information This communication does not constitute an offer to buy or sell or the securities in any jurisdiction in which such offer, solicitation or sale would solicitation of an offer to sell or buy any securities. This communication be unlawful prior to registration or qualification un
Slide 4: Proposed Transaction Summary
Proposed Transaction Summary Consideration of $7.50 in cash and 1.3223 shares of 3D Systems common stock per Stratasys ordinary share Implies a nominal value per Stratasys share of approximately ~$20 based on 3D Consideration Systems’ 10-Day VWAP as of June 26, 2023 Open to offering Stratasys shareh
Slide 5: An Unparalleled Transaction for Stratasys Shareholders
An Unparalleled Transaction for Stratasys Shareholders 1 2 3 Creates Player with Delivers Exceptional Secures Higher Value Differentiated Scale Cost Synergies that Through Stronger and Broadest Drive Significant Value Financial Profile Capabilities in Rapidly Creation Growing Industry Higher Value.
Slide 6: Uniquely Attractive Combination
Uniquely Attractive Combination 6
Slide 7: Fragmented Industry In Need of Scale
Fragmented Industry In Need of Scale Metal Additive Manufacturing Technology Landscape Polymer Additive Manufacturing Technology Landscape Scale drives costs down and improves ability to compete with emerging Chinese players 7 Source: Ampower Insights
Slide 8: Shareholders to Benefit from Supportive Industry Trends
Shareholders to Benefit from Supportive Industry Trends Compelling Growth Drivers Additive Manufacturing experiencing an inflection point as it transitions from the lab to the factory floor driven by improved economics and supply chain risk reduction $80B+ Continuous expansion of Additive Manufactur
Slide 9: Building a Scaled Champion
Building a Scaled Champion Creates the Most Compelling Additive Manufacturing Pure-Play Stock 2023E Revenue ~40K Customers1 600+ Channel Partners1 1M+ Parts Printed Per Day2 9 Source: Public Filings, Management Estimates. 1 Based on 3D Systems management estimates. 2 Reflects 3D Systems standalone.
Slide 10: Scale Drives Greater Profitability
Scale Drives Greater Profitability “The problem of this industry (…) no one has scale. So we want to scale. We want an inflection point. We want to be in manufacturing, but at the same time, we don't have the scale to do it. It's all about scale. And we can, as an industry, wait for this scale, but
Slide 11: An Attractive Core Business Poised for Further Growth
An Attractive Core Business Poised for Further Growth Existing Core Business Segments Industrial Solutions Healthcare Solutions Dental Solutions • 9% year-over-year growth1 (ex. Dental) • Industry working through high- • Driven by market leadership in • 22% year-over-year growth1 levels of inventory
Slide 12: 3D Systems' Differentiated Position in Regenerative Medicine
Supercharged By a True Growth Engine: 3D Systems’ Incredibly Differentiated Position in Regenerative Medicine 3D Systems Human Organs (Lung, Kidney, and Liver) Bioprinting Leadership Most Complex Object Ever 3D Printed: • 2 Lobes • 5,000 kilometers of vasculature • 213 Million Alveoli • 44 Trillion
Slide 13: On Track on Our Roadmap for 3D-Printed Organs, Tissues and Bioprinting
On Track on Our Roadmap for 3D-Printed Organs, Tissues and Bioprinting Jan 2021 Jun 2022 Feb 2023 Announced expansion of United Therapeutics Introduced Regenerative regenerative medicine / collaboration produced the Tissue Program intended to bioprinting solution world’s most complex 3D- provide unp
Slide 14: Highly Complementary Portfolio
Highly Complementary Portfolio Digital Light Printing (DLP) DP Metals Jetting: Inkjet (Poly) Selective Laser Sintering Selective Absorption (Laser-Based Fusion) Fusion Proven Technologies With Little Overlap1 Jetting: Inkjet (Wax) Extrusion Large Format Fused Filament SSYS Small-Med Format Fused Fab
Slide 15: Comprehensive Offering of Additive Technologies Across Applications
Comprehensive Offering of Additive Technologies Across Applications VSP & Medical Durable Dental Anatomical Automotive Aerospace Bio Printing Desktop Devices Goods Models Inkjet (Poly) ✓ ✓ ✓ Inkjet (Wax) ✓ ✓ ✓ CJP ✓ ✓ Small-Med Format FDM (Filament) ✓ ✓ ✓ ✓ ✓ Large Format FFF (Pellets) ✓ ✓ ✓ DLP (Fi
Slide 16: Significant Near-Term Cost Synergies Jointly Identified and Agreed
Significant Near-Term Cost Synergies Jointly Identified and Agreed Upon by 3D and Stratasys Teams Breakdown of Expected Synergies SG&A Savings COGS • Supply chain efficiencies • Eliminate overlapping functions • Effective global services support Synergies $100mm+ SG&A identified during R&D Integrati
Slide 17: Best-in-Class Combined Financial Profile
Best-in-Class Combined Financial Profile ~$1.2bn ~$885mm ~$150mm Combined 2023E Revenue2 Combined 2023E Revenue2 (More than $1bn in Revenue TODAY, NOT by 2026) ~$145mm ~$55mm Pro Forma Cash on Balance Sheet1 Combined 2023E EBITDA3 Combined 2023E EBITDA4 Assuming run rate cost synergies Assuming run
Slide 18: Attractive and Credible, Combined Financial Profile
Attractive and Credible, Combined Financial Profile, Jointly Agreed with Stratasys Combined Company Near-Term Financial Profile Organic Revenue Growth Double-Digit Gross Profit Margin ~50% R&D Spend ~12% SG&A Spend ~25% EBITDA Margin 15%+ 18 Source: Combined Management Estimates from September 2022
Slide 19: Significant and Unique Value Creation
Significant and Unique Value Creation: + $ 4.00 $ 1.5B $ 3.50 $ 3.2B $ 3.00 $(0.6)B $ 2.50 $ 1.2B $ 2.00 Illustrative 15x $ 1.8B ~$26 Capitalization Implied Multiple on $100mm Synergies $ 0.5 Stratasys Value per Share $ 1.50 (Cash Consideration) $ 1.1B $ 1.00 ~41% ~71% Stratasys Value Uplift to Owne
Slide 20: Clearly Superior Proposal
Clearly Superior Proposal 20
Slide 21: Skepticism Around the Merits of a Stratasys + Desktop Metal Combination
Skepticism Around the Merits of a Stratasys + Desktop Metal Combination “It feels like I want to be more excited “We believe this combination (SSYS and “Stratasys to Acquire about the acquisition, but those DM) would never have transpired without Desktop Metal; Our Initial numbers aren't -- they're
Slide 22: Unrealistic EBITDA Growth Expectations Given No Basis in Historical Performance
Unrealistic EBITDA Growth Expectations Given No Basis in Historical Performance STRATASYS MANAGEMENT DESKTOP ACTUAL DESKTOP METAL EBITDA RESULTS METAL EBITDA PROJECTIONS1 $ 180 $ 200 $ 150 $ 99 $ 100 $ 50 $ 37 $0 $(50) $(73) $(93) $(100) $(96) $(101) $(118) $(150) 2019A 2020A 2021A 2022A Mar-2023 LT
Slide 23: Desktop Metal Has a History of Questionable Capital Deployment
Desktop Metal Has a History of Questionable Capital Deployment Leading to Meaningful Impairments ~$230M impairment ~$270M impairment Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 $680M+ cumulative cash burn ~$500M February 2021 May 2021 Beacon Bio June 2021 cumulative goodw
Slide 24: Stratasys' Next Big Thing in Metals is a 28-Year-Old Technology
Stratasys’ “Next Big Thing” in Metals is a 28-Year-Old Technology In 28 years, ExOne Binder Jet In 8 years as a public company, never approached mass production ExOne never made a profit ExOne Revenue ($mm) ExOne EBITDA ($mm) $ 65 $ 59 $ 53 $(7) $(9) $(10) 2018 2019 2020 2018 2019 2020 1995 2002
Slide 25: Metal Binder Jet Is A Niche Application
Metal Binder Jet Is A Niche Application, Producing Small, Porous And Fragile Parts That Are Not Suited For Mass Production Binder Jet is no silver bullet for mass production – building into a large reliable partner that can support supply chain longer term is unrealistic Metals Hardware Revenue by P
Slide 26: 3D Systems is the Best Entry into Metals for Stratasys
3D Systems is the Best Entry into Metals for Stratasys DMP Metals – Laser Bed Fusion Metals Binder Jet Metals Binder Jet Metals not ready for mass production None of the players in Binder Jet Dental ✓ Metals have achieved consistent Healthcare – Guides profitability and Instrumentation ✓ Hea
Slide 27: Higher, More Certain Near-Term Synergies
Higher, More Certain Near-Term Synergies + ~$100M+ vs ~$50M Cost Synergies Cost Synergies Synergies Expected to be Fully Realized in 18 Months Post Close, Achieved in 2+ years? with 60% Realized in Year One ✓ Complementary technologies drive R&D ? $50 million is incremental to the $100 million of op
Slide 28: Stratasys and Desktop Metal's Aspirational Value Uplift
Stratasys and Desktop Metal’s Aspirational Value Uplift Based On Unlikely Synergies and Multiple Expansion “We wish they could point us to JP Morgan fairness opinion in “Desktop Metal stockholders as of immediately prior one acquisition in this space that merger proxy for Stratasys to the completion
Slide 29: Setting the Record Straight
Setting the Record Straight + $ 1.5B $ 3.2B $(0.6) $ 1.2B $ 2.3 $ 1.8B $ 0.7 $ 1.0 Illustrative 15x $ 0.5 Capitalization (Cash 41%4 Multiple on Consideration) $ 1.1B $ 0.6 Illustrative 15x $100mm Synergies ~41% Capitalization Stratasys Multiple on Ownership $50mm in $ 1.3 Synergies $ 1.4 $ 1.4 Combi
Slide 30: Conclusion
Conclusion 30
Slide 31: The Market Has Spoken
The Market Has Spoken Stratasys Three-Day Share Price Reaction Post-Announcement 14.1 % 2.5 % (1.5)% Merger Announcement Tender Offer Announcement Offer Public Announcement SSYS + DM Merger Announcement (25-May-23) Nano Tender Offer Announcement (09-Mar-23) 3D Systems Offer Announcement (02-Jun-23)
Slide 32: An Unparalleled Transaction
An Unparalleled Transaction + Delivers Significant Value Creation Concerning Impact on Stratasys’ ✓ Combined with Exceptional Cost ? Financial Profile and Cash Generation Synergies Creates Unmatched Global Player in a Questionable Synergies and Highly ✓ Rapidly Scaling Industry ? Speculative Multipl
Slide 33: Appendix
Appendix 33
Slide 34: Experienced 3D Systems Management Team
Experienced 3D Systems Management Team Jeff Graves Michael Turner Andrew Johnson Menno Ellis CEO CFO Chief Corporate EVP, Healthcare Solutions Development Officer, and Chief Legal Counsel • Joined in May 2020 • Joined in August 2022 • Joined in July 2006 • Joined in December 2016 • Experience: Previ
Slide 35: True Innovation Powerhouse
True Innovation Powerhouse + 3,400+ ~$700mm Patents and Pending Patent Applications Last 4-Year Cumulative R&D Spend ✓ Expansive IP portfolio with applications across ✓ Ongoing development of best-of-breed digital industries manufacturing ecosystem ✓ Proven ability to secure patents with over 1,000
Slide 36: Combined Go-to-Market Footprint
Combined Go-to-Market Footprint 750+ 130+ R&D Team Members2 Countries3 100+ Application Experts2 600+ + Channel Partners1 190+ 340+ Direct Sales Team Global Customer Support Team Members2 Members2 36 Source: Public Filings, Management Estimates. 1 Based on 3D Systems management estimates. 2 Reflects
Slide 37: Side-by-Side: Laser Bed Fusion vs Binder Jet
Side-by-Side: Laser Bed Fusion vs Binder Jet DMP Metals – Powder Bed Fusion Metals Binder Jet Metals A liquid binding agent is deposited onto thin metal powder layers; Process A laser selectively fuses metal powder particles together secondary sintering process is required Materials ++ Offers more m
Slide 38: 3D Systems Welcomes Constructive Engagement
3D Systems Welcomes Constructive Engagement History of Proposals Received by Stratasys Board of Directors Proposal Implied Value Implied Premium to Stratasys Stratasys Board Date Buyer Per Stratasys Share at Market Stock Price Decision Jan-16-2021 $43.48 37% No engagement Feb-9-2021 $ 60.00 13 % Eng
Slide 39: Well-Positioned to Obtain Regulatory Clearances
Well-Positioned to Obtain Regulatory Clearances 3D Systems is confident that all applicable regulatory clearances for the proposed combination will be obtained and has requested Stratasys permit its regulatory advisors to meet with 3D’s advisors to confirm this conclusion 1 2 3 Combined R&D Additive