Desktop Metal Files Lawsuit Against Nano Dimension for Breach of Merger Agreement

Rhea-AI Summary

Desktop Metal (NYSE: DM) has filed a lawsuit against Nano Dimension in the Delaware Court of Chancery, alleging breach of merger agreement obligations. The lawsuit claims Nano Dimension failed to use reasonable best efforts to obtain regulatory approval for the merger. Desktop Metal seeks specific performance, including cooperation in obtaining Committee on Foreign Investment in the United States (CFIUS) approval and executing the proposed mitigation agreement.

The Court has scheduled an expedited hearing on December 30, 2024, regarding Desktop Metal's motion for an expedited trial in January. All other regulatory conditions have been satisfied, with CFIUS approval being the final remaining requirement. Desktop Metal aims to enforce contractual obligations and complete the merger, which it views as a strategic opportunity to create value for stakeholders.

Positive

• Court has granted an expedited hearing for the merger dispute
• All regulatory conditions except CFIUS approval have been satisfied

Negative

• Legal dispute over merger agreement compliance may delay or jeopardize the deal
• Pending CFIUS approval creates uncertainty for merger completion
• Additional legal costs and resources required for lawsuit proceedings

Insights

Legal Expert

This lawsuit represents a critical development in the Desktop Metal-Nano Dimension merger saga. The filing in Delaware's Court of Chancery, known for its expertise in corporate matters, centers on Nano Dimension's alleged failure to pursue CFIUS approval diligently. The expedited hearing request for December 30, 2024, signals Desktop Metal's urgency to resolve this dispute. The lawsuit's focus on specific performance is particularly noteworthy - Desktop Metal isn't seeking monetary damages but rather wants to force Nano Dimension to complete the regulatory process and close the deal. The claim that all other regulatory conditions have been met except CFIUS approval strengthens Desktop Metal's position. The Court's decision could set important precedents for future cross-border merger disputes, especially regarding the interpretation of "reasonable best efforts" in securing regulatory approvals.

Financial Analyst

The merger dispute adds significant uncertainty to Desktop Metal's $112M market valuation. With Nano Dimension allegedly dragging its feet on CFIUS approval, the deal's completion faces substantial risks. The lawsuit's timing and Desktop Metal's pursuit of specific performance rather than damages suggests they still see strategic value in the merger. For investors, this legal battle creates a complex situation - while a successful merger could unlock synergistic value, the ongoing dispute and regulatory hurdles could lead to prolonged uncertainty or deal termination. The market will likely price in this uncertainty, potentially affecting both companies' stock performance until resolution. The focus on CFIUS approval also highlights the increasing scrutiny of cross-border technology transactions, particularly those involving advanced manufacturing capabilities.

BURLINGTON, Mass.--(BUSINESS WIRE)-- Desktop Metal, Inc. (NYSE: DM) (“Desktop Metal”) today announced that it has filed a lawsuit against Nano Dimension Ltd. (“Nano Dimension”) in the Delaware Court of Chancery (the “Court”), alleging that Nano Dimension has breached its obligation to use reasonable best efforts to obtain regulatory approval as soon as practicable in connection with the merger agreement between the parties (the “Merger Agreement”). The Court has scheduled an expedited hearing on December 30, 2024, to hear Desktop Metal’s motion for an expedited trial to be held in January.

Desktop Metal seeks specific performance, including, but not limited to, requiring Nano Dimension to cooperate in seeking approval by the Committee on Foreign Investment in the United States (“CFIUS”), including finalizing negotiations and executing the mitigation agreement proposed by CFIUS (as required by the Merger Agreement), and to close the merger within five business days of receiving CFIUS’ approval.

Desktop Metal also seeks a declaration of the Court that, among other things, Nano Dimension has failed to perform its obligations to use reasonable best efforts to obtain regulatory approval and remains obligated to use its reasonable best efforts to take all actions necessary to consummate the merger as soon as reasonably possible, and injunctive relief enjoining Nano Dimension from terminating the Merger Agreement or taking any action inconsistent with its obligations under the Merger Agreement.

All other regulatory conditions have been satisfied under the Merger Agreement and the remaining regulatory condition to closing the merger is receipt of CFIUS approval. 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 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 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241217987296/en/

Investors:

(857) 504-1084

DesktopMetalIR@icrinc.com

Source: Desktop Metal, Inc.

FAQ

What is the reason for Desktop Metal's lawsuit against Nano Dimension?

Desktop Metal (DM) filed a lawsuit alleging Nano Dimension breached its obligation to use reasonable best efforts to obtain regulatory approval for their merger agreement, specifically regarding CFIUS approval.

When is the expedited hearing scheduled for Desktop Metal's lawsuit?

The Delaware Court of Chancery has scheduled an expedited hearing for December 30, 2024, to consider Desktop Metal's motion for an expedited trial in January.

What regulatory approvals are still needed for the DM-Nano Dimension merger?

The only remaining regulatory condition is approval from the Committee on Foreign Investment in the United States (CFIUS). All other regulatory conditions have been satisfied.

What specific actions is Desktop Metal (DM) seeking through the lawsuit?

DM seeks specific performance requiring Nano Dimension to cooperate in obtaining CFIUS approval, execute the proposed mitigation agreement, and close the merger within five business days of receiving CFIUS approval.

What is the current status of the Desktop Metal merger agreement?

The merger agreement remains active but faces challenges due to the lawsuit and pending CFIUS approval, with Desktop Metal seeking court intervention to enforce contractual obligations.