Delaware Court of Chancery Grants Desktop Metal’s Motion for an Expedited Trial; Trial to be Set for February; Desktop Metal Files Second Lawsuit Against Nano Dimension for Breach of Merger Agreement

Rhea-AI Summary

Desktop Metal (NYSE: DM) has secured an expedited trial in Delaware Court of Chancery for its lawsuit against Nano Dimension, scheduled for February 24, 2025. The lawsuit, filed December 16, 2024, alleges Nano Dimension breached merger agreement obligations by failing to obtain regulatory approval efficiently.

Additionally, Desktop Metal filed a second lawsuit on December 31, 2024, against both Nano Dimension and Markforged, concerning Nano Dimension's September 2024 agreement to acquire Markforged. Desktop Metal claims this acquisition would increase the risk of regulatory prohibition and delay their merger's consummation. The company seeks to prevent the Markforged Transaction from closing until after their merger completes.

Initially, Desktop Metal didn't expect the Markforged deal to impact their merger, assuming their transaction would close first. However, due to Nano Dimension's delays in obtaining CFIUS approval, circumstances have changed.

Positive

• Expedited trial granted, potentially accelerating resolution of merger disputes
• Legal actions demonstrate proactive defense of shareholder interests

Negative

• Ongoing delays in obtaining CFIUS approval for merger
• Legal complications with Nano Dimension potentially affecting merger completion
• Risk of regulatory prohibition due to Markforged acquisition

Insights

Legal Expert

<p>The expedited trial grant and dual lawsuits mark a critical legal escalation in Desktop Metal's <money>$450M</money> merger saga with Nano Dimension. The February trial timeline is remarkably swift for Delaware Chancery Court, indicating the court's recognition of the matter's urgency. The first lawsuit's focus on <b>reasonable best efforts</b> in obtaining CFIUS approval presents a compelling case, as this standard is well-established in Delaware merger jurisprudence. The second lawsuit targeting the Markforged acquisition introduces a complex antitrust dimension, potentially creating a <b>triple-merger deadlock</b> that could attract heightened regulatory scrutiny. The legal strategy appears designed to force Nano Dimension's hand, either to expedite CFIUS approval or abandon the Markforged deal. For simplified understanding: Picture three companies trying to merge while two separate deals are happening simultaneously - this creates a legal traffic jam that needs to be resolved in a specific order.</p>

M&A Analyst

<p>The merger complications reveal deeper strategic implications for the 3D printing industry consolidation. Desktop Metal's aggressive legal stance suggests they view Nano's Markforged pursuit as a potential <b>poison pill</b> to their own merger agreement. The CFIUS approval delays are particularly concerning as they could impact Desktop Metal's <b>market position</b> and valuation, especially given their sub-<money>$100M</money> market cap. The timing of Nano's Markforged agreement raises questions about their commitment to the Desktop Metal merger. In simple terms: It's like trying to buy two houses simultaneously while still needing bank approval for the first purchase - it complicates both deals and could potentially derail both transactions. This situation could reshape the competitive landscape in the additive manufacturing sector, potentially forcing a reassessment of valuations across the industry.</p>

BURLINGTON, Mass.--(BUSINESS WIRE)-- Desktop Metal, Inc. (NYSE: DM) (“Desktop Metal”) today announced that at a hearing held in the Delaware Court of Chancery on December 30, 2024, the Court granted Desktop Metal’s motion for an expedited trial in the lawsuit Desktop Metal filed on December 16, 2024 against Nano Dimension Ltd. (“Nano Dimension”). In the lawsuit, Desktop Metal alleged that Nano Dimension has breached its obligation under the merger agreement between Desktop Metal and Nano Dimension (the “Merger Agreement”) to use reasonable best efforts to obtain regulatory approval and close the merger contemplated by the Merger Agreement (the “Merger”) as soon as reasonably possible. The trial is expected to be scheduled for the week of February 24, 2025.

In addition, Desktop Metal announced that on December 31, 2024, it filed a second lawsuit against Nano Dimension, which also named Markforged Holding Corporation (“Markforged”) as a defendant, in the Court of Chancery, alleging that Nano Dimension’s September 2024 agreement (the “Markforged Agreement”) to acquire Markforged (the “Markforged Transaction”), if consummated, would constitute a breach of Nano Dimension’s obligation in the Merger Agreement to not consummate acquisitions that would reasonably be expected to (i) increase, in any material respect, the risk of a governmental entity entering an order prohibiting, or (ii) materially delay, the consummation of the Merger. At the time it was announced, Desktop Metal did not anticipate that the Markforged Transaction would impact the closing of the Merger because all parties anticipated that the Merger would close before the Markforged Transaction could close. Due to events that occurred after that time, specifically Nano Dimension’s ongoing delays in obtaining CFIUS approval for the Merger, Desktop Metal believes that the consummation of the Markforged Transaction would materially increase the risk of a governmental entity preventing or delaying the consummation of the Merger. Desktop Metal is therefore seeking an order restraining Nano Dimension and Markforged from closing the Markforged Transaction until after the Merger has closed.

The Merger between Desktop Metal and Nano Dimension represents a significant strategic opportunity for both companies, combining complementary strengths to create value for shareholders, employees and customers. Desktop Metal remains focused on upholding the contractual obligations agreed upon by both parties, closing the transaction and delivering on the potential of the Merger. Desktop Metal is confident that a closing of the Merger may be completed expeditiously.

About Desktop Metal

Desktop Metal (NYSE: DM) is driving Additive Manufacturing 2.0, a new era of on-demand, digital mass production of industrial, medical, and consumer products. Its innovative 3D printers, materials, and software deliver the speed, cost, and part quality required for this transformation. Desktop Metal is home to the original inventors and world leaders of the 3D printing methods it believes will empower this shift, binder jetting and digital light processing. Today, Desktop Metal’s systems print metal, polymer, sand and other ceramics, as well as foam and recycled wood. Manufacturers use its technology worldwide to save time and money, reduce waste, increase flexibility, and produce designs that solve the world’s toughest problems and enable once-impossible innovations. Learn more about Desktop Metal and its #TeamDM brands at www.desktopmetal.com.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Such forward-looking statements include statements relating to the proposed transaction between Desktop Metal and Nano Dimension, including statements regarding the scheduling of a trial, closing of the Merger, and all other statements other than statements of historical fact that address activities, events or developments that Desktop Metal intends, expects, projects, believes or anticipates will or may occur in the future. Such statements are based on management’s beliefs and assumptions made based on information currently available to management. All statements in this communication, other than statements of historical fact, are forward-looking statements that may be identified by the use of the words “outlook,” “guidance,” “expects,” “believes,” “anticipates,” “should,” “estimates,” “may,” “will,” “intends,” “projects,” “could,” “would,” “estimate,” “potential,” “continue,” “plan,” “target,” or the negative of these words or similar expressions. These forward-looking statements involve known and unknown risks and uncertainties, which may cause Desktop Metal’s actual results and performance to be materially different from those expressed or implied in the forward-looking statements. Factors and risks that may cause Desktop Metal’s actual results or performance to be materially different from those expressed or implied in the forward-looking statements include, but are not limited to, (i) the occurrence of any event, change or other circumstance that could give rise to the termination of the proposed transaction; (ii) the ability to satisfy closing conditions to the completion of the proposed transaction; and (iii) other risks related to the completion of the proposed transaction, the pending litigation and actions related thereto.

The forward-looking statements included in this communication are made only as of the date hereof. Desktop Metal does not undertake any obligation to update any forward-looking statements to reflect subsequent events or circumstances, except as required by law.

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Investors:

(857) 504-1084

DesktopMetalIR@icrinc.com

Source: Desktop Metal, Inc.

FAQ

When is Desktop Metal's (DM) expedited trial against Nano Dimension scheduled?

The trial is expected to be scheduled for the week of February 24, 2025, in the Delaware Court of Chancery.

Why did Desktop Metal (DM) file a second lawsuit against Nano Dimension?

Desktop Metal filed the second lawsuit on December 31, 2024, alleging that Nano Dimension's planned Markforged acquisition would increase regulatory risks and potentially delay their merger's completion.

What is the main issue with CFIUS approval in the Desktop Metal (DM) merger?

According to the lawsuit, Nano Dimension is experiencing ongoing delays in obtaining CFIUS approval, which is necessary for the merger's completion.

How does the Markforged acquisition affect Desktop Metal's (DM) merger with Nano Dimension?

Desktop Metal claims the Markforged acquisition could materially increase the risk of regulatory prohibition and delay the merger's consummation.