Desktop Metal Said to Have Explored Deal for SLM Solutions

Desktop Metal Inc., the U.S. maker of 3-D printing machines, recently approached rival SLM Solutions Group AG about a potential takeover before putting the plans on ice, according to people familiar with the matter.

Desktop Metal signaled its interest in making an all-stock bid valuing the German company at around 600 million euros ($713 million), according to the people. The two firms held some informal talks about the potential offer of roughly 30 euros per share before Desktop Metal decided not to proceed, the people said, asking not to be identified because the information is private.

The decline in Desktop Metal’s share price over the past few days has made it harder to move ahead with a transaction, the people said. It wasn’t immediately clear whether negotiations could resume in the future.

Shares of Desktop Metal jumped as much as 10% in early trading Tuesday. They were up 8.6% at 9:51 a.m. in New York, giving the company a market capitalization of $3.9 billion. SLM shares rose 17% in Frankfurt, valuing it at 353 million euros..

A spokesperson for SLM declined to comment. A representative for Burlington, Massachusetts-based Desktop Metal didn’t respond to a request for comment.

Billionaire Paul Singer’s Elliott Management Corp. is the largest shareholder in SLM with a 28% stake, according to data compiled by Bloomberg. The activist investment firm accumulated a holding in SLM in 2016, when it was the target of a failed takeover bid from General Electric Co.

Desktop Metal went public in December through a merger with blank check company Trine Acquisition Corp. It currently trades at about 36 times forecast 2021 revenue, while SLM is valued at 4.1 times forecast sales, according to data compiled by Bloomberg.

The powder bed fusion technology used by SLM is geared toward production of high-performance and high-value components. It’s seen as complementary to Desktop Metal’s binder jet process, which is more suitable for making low-cost, high-volume metal parts.

SLM, based in the northern German city of Luebeck, said in February that it expects to report its revenue rose 24% last year to 61 million euros. It’s forecasting a loss before interest, taxes, depreciation and amortization of about 14.5 million euros to 15.5 million euros. SLM announced a new model in November, dubbed the NXG XII 600, which got a boost recently when the company signed a memorandum of understanding for delivery of five machines.

©2021 Bloomberg L.P.

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