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3D Desktop Metal Files Second Lawsuit
Against Nano Dimension Over Markforged Acquisition.
Desktop Metal, an industrial 3D printer manufacturer based in Massachusetts, has filed a second lawsuit against Nano Dimension. This latest legal action challenges Nano Dimension’s agreement to acquire Markforged, claiming that completing the deal, scheduled for September 2024, would violate Nano Dimension’s obligations under the Merger Agreement with Desktop Metal.Furthermore, the Delaware Court of Chancery has granted Desktop Metal’s request for an expedited trial in its first lawsuit against Nano Dimension. The trial is set to begin the week of February 24, 2025.
Focus on Markforged Deal
The new lawsuit specifically targets Nano Dimension’s planned $115 million acquisition of Markforged, arguing that the deal breaches the terms of the merger agreement between Nano Dimension and Desktop Metal. Desktop Metal claims that delays in securing CFIUS approval for the merger put the completion of the Nano Dimension transaction at risk, further complicating the merger process.This lawsuit presents a significant challenge to Nano Dimension, but it is even more problematic for Markforged, which has been underperforming. The company’s stock price has fallen since September 2024, and it has received multiple noncompliance warnings from the NYSE. Markforged stands to benefit from the acquisition, but the pending transaction may now face additional hurdles.
Desktop Metal is seeking a court order to prevent Nano Dimension and Markforged from finalizing their deal until Desktop Metal’s own merger is completed. The company, which is experiencing a decline in sales, has expressed concerns about its future. In a conference call on July 31, 2024, CEO Ric Fulop emphasized that the failure to close the merger could have dire consequences for the company’s survival, stating: “The alternative of not closing a transaction now, with Nano and its strong balance sheet, and cooperative management, may lead to a fatal prognosis and results for our Company’s existence.”
Despite these challenges, Fulop remains optimistic about the merger, calling it a crucial strategic move for Desktop Metal shareholders. He added, “We firmly believe that this business combination with Nano Dimension is the right strategic move for Desktop Metal shareholders at this critical juncture, and our entire team is excited about making this combination successful and working with the team at Nano to make customers successful.”
However, these ongoing lawsuits suggest a sense of urgency, as Desktop Metal seeks to accelerate the merger process, which it still views positively.
Motion for Expedited Trial
Desktop Metal’s motion for an expedited trial was granted following a December 30, 2024, hearing in the Delaware Court of Chancery. The trial is now expected to take place in the last week of February 2025. Nano Dimension has argued that the lawsuit is “without merit” and inconsistent with the terms of the Merger Agreement.On December 31, 2024, Desktop Metal filed its second lawsuit against Nano Dimension, naming Markforged as a defendant. The lawsuit claims that the acquisition of Markforged violates Nano Dimension’s obligation to refrain from consummating acquisitions that could jeopardize the completion of the merger with Desktop Metal.
Initially, Desktop Metal did not anticipate that the Markforged acquisition would impact its own merger. The company had stated that it expected the merger to close before the Markforged transaction. Nonetheless, Desktop Metal remains committed to completing the merger and enforcing the contractual obligations agreed upon by both parties.
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