DEFA14A: Markforged Addresses Lawsuits and Updates Merger Details in Proxy Supplement

Markforged has filed a supplement to its proxy statement addressing stockholder lawsuits and providing additional details regarding its merger with Nano Dimension.

Summary

• Markforged has supplemented its definitive proxy statement regarding its merger with Nano Dimension following stockholder lawsuits alleging misrepresentation and omissions.
• The supplement includes additional disclosures related to the financial analysis conducted by Evercore, specifically regarding the discounted cash flow analysis, selected public company trading analysis, and selected transactions analysis.
• The discount rates used in the discounted cash flow analysis were between 18.0% and 22.0%, based on the company's weighted average cost of capital.
• The selected public company trading analysis included Desktop Metal, Stratasys, and 3D Systems, with TEV/2024E Revenue multiples ranging from 0.7x to 1.2x and TEV/2025E Revenue multiples ranging from 0.7x to 1.1x.
• The selected transactions analysis reviewed deals in the additive manufacturing industry since 2021, with TEV/LTM Revenue multiples ranging from 1.1x to 12.5x.
• The supplement also clarifies the terms of the Earnout Shares, which will be issued upon a change of control by July 14, 2026, or vest based on stock price targets of $125 and $150.
• There are no new employment agreements with Markforged's executive officers in connection with the merger, and no binding agreements regarding post-transaction employment.
• The company has received one demand for books and records and fourteen demand letters from purported stockholders seeking additional disclosures in the Definitive Proxy Statement.
• The company believes no further disclosure is required but is providing supplemental disclosures to avoid nuisance and possible expense and business delays.

Sentiment

Score: 4

Explanation: The sentiment is moderately negative due to the ongoing lawsuits and demands, which create uncertainty and potential risks for the company. However, the company is taking proactive steps to address these issues.

Positives

• The company is proactively addressing stockholder concerns by providing supplemental disclosures.
• The company is taking steps to avoid potential business delays by addressing the lawsuits and demands.
• The company is providing additional details on the financial analysis conducted by Evercore.

Negatives

• The company is facing lawsuits from stockholders alleging misrepresentation and omissions.
• The company has received multiple demands for additional disclosures.
• The merger is causing disruption and potential delays due to legal challenges.

Risks

• The outcome of the lawsuits and demands is uncertain.
• Additional lawsuits or demands may be filed related to the merger.
• The merger could be delayed or terminated due to legal challenges or other factors.
• The company's ability to operate its business and retain key personnel could be affected by the merger and related litigation.
• There are risks associated with the disruption of management's attention from ongoing business operations due to the proposed transaction.

Future Outlook

The document includes forward-looking statements regarding the proposed transaction, its potential effects, and the ability of the parties to complete the merger, but these are subject to risks and uncertainties.

Management Comments

• The Company believes that no further disclosure is required to supplement the Definitive Proxy Statement.
• The Company and the individual defendants intend to vigorously defend against the Complaints, Demands and any subsequently filed complaints or similar actions.
• The Company specifically denies all allegations in the Complaints and Demands that any additional disclosure was or is required or is material.

Industry Context

The document provides insight into the valuation multiples used in the additive manufacturing industry, including comparable companies and recent transactions, which is useful for understanding the context of the merger.

Comparison to Industry Standards

• The selected public company trading analysis included Desktop Metal, Stratasys, and 3D Systems, which are key players in the additive manufacturing industry.
• The TEV/2024E Revenue multiples for these companies ranged from 0.7x to 1.2x, and the TEV/2025E Revenue multiples ranged from 0.7x to 1.1x, providing a benchmark for Markforged's valuation.
• The selected transactions analysis included deals such as Desktop Metal's acquisition of The ExOne Company (5.9x TEV/LTM Revenue) and Nikon's acquisition of SLM Solutions Group (6.4x TEV/LTM Revenue), which are significant transactions in the industry.
• The range of TEV/LTM Revenue multiples in the selected transactions (1.1x to 12.5x) highlights the variability in valuations within the additive manufacturing sector.

Legal Proceedings

• The company is facing lawsuits from stockholders alleging misrepresentation and omissions in the proxy statement.
• The company has received one demand for books and records and fourteen demand letters from purported stockholders seeking additional disclosures.

Stakeholder Impact

• Shareholders are impacted by the lawsuits and the potential for delays or termination of the merger.
• Employees may be affected by the uncertainty surrounding the merger and potential changes in management.
• Customers and suppliers may be impacted by the potential disruption to the company's operations.

Next Steps

• The company will continue to defend against the lawsuits and demands.
• The special meeting of stockholders will be held on December 5, 2024.
• The company will continue to work towards completing the merger with Nano Dimension.

Key Dates

Keywords

merger, proxy statement, lawsuit, Nano Dimension, Markforged, stockholders, disclosure, additive manufacturing, Evercore, financial analysis