The interim chief executive officer of Nano Dimension Ltd. outlined a new strategic approach for the additive manufacturing business in a letter to apparently restive shareholders. Julien Lederman was appointed on January 6 to replace Yoav Stern, who had guided the organization through several contentious efforts to consolidate rival AM businesses.
“Investors’ lack of confidence in the value and direction of Nano Dimension is reflected in the company’s substantial negative enterprise value which has persisted for over three years,” Lederman wrote. He accepted the claims that shareholder-management relationships “were unhealthy”; that the firm’s “technology vision” has not aligned with “business strategy and deliverables”; and that operating expenses have been “disproportionately high”.
The interim CEO then announced a $150-million share repurchase plan, and said the company would not renew a shareholder rights plan (“poison pill”) put in place and renewed by previous directors.
Former CEO Stern led an effort to take over rival AM business Stratasys through much of 2023, and then used the company’s stake in Stratasys to quash that firm’s merger with Desktop Metal.
Later, in July 2024, Stern struck a deal to acquire Desktop Metal for $183 million.
But that plan has landed Nano Dimension on a court docket, as Desktop Metal attempts to force completion of the takeover, which was expected to close in December. A trial is set to begin February 24 to determine whether Nano Dimension violated the terms of the July takeover agreement with Desktop Metal.
Desktop Metal stockholders approved the planned merger in October, but that company now alleges Nano Dimension has failed to obtain regulatory approval to complete the deal as promised.
A related point of contention is a subsequent, separate takeover plan that Nano Dimension negotiated with Markforged Holdings.
Lederman allowed for the possibility that the one or both of the mergers may be cancelled, writing that Nano Dimension’s two definitive merger agreements (with Desktop Metal and Markforged Holdings) “remain subject to ongoing regulatory review processes. These transactions have resulted in ongoing discussions with the regulators as well as litigation initiated by Desktop Metal. We are actively engaged in addressing both the regulatory inquiries and the litigation, the outcome of which could impact the timing or ability to consummate either or both mergers under their current terms.”
In his letter, Lederman also acknowledged shareholders’ view “that change at Nano Dimension is warranted.
“Investors’ lack of confidence in the value and direction of Nano Dimension is reflected in the company’s substantial negative enterprise value which has persisted for over three years,” the interim CEO wrote in the letter to shareholders.
He also accepted the claims that shareholder-management relationships “were unhealthy”; that the firm’s “technology vision” has not aligned with “business strategy and deliverables”; and that operating expenses have been “disproportionately high”.
Lederman then set forth three new operating principles for the business:
- Nano Dimension directors and management are driven by shareholder interests;
- Assessment of capital allocation will be measured against demonstratable return on investment;
- And expense management will be “prudent…based on ratios to revenue of a responsible advanced manufacturing leader.”
Nano Dimension is understood to be conducting an executive search for Stern’s permanent replacement.
