(Bloomberg) -- Stratasys Ltd. agreed to acquire Desktop Metal Inc. in an all-stock deal that will create a leading 3D printer company valued at about $1.8 billion. 

Desktop Metal shareholders will receive 0.123 Stratasys shares for every class A share they already own, according to a statement Thursday that confirmed an earlier Bloomberg News report. That’s worth about $1.88 per share based on Tuesday’s prices, or about a 2% premium to Desktop Metal’s close that day.

The combined company will have greater heft in the fragmented 3D printing industry and is targeting $1.1 billion in 2025 revenue. More than half its sales will come from the fast-growing segment of end-use parts manufacturing and mass production, according to the statement. Existing Stratasys shareholders will own approximately 59% of the merged entity. 

Several next-generation, 3D-printing companies have sprung up over the past decade, with venture capital investing heavily in the space. These companies have been looking to upend how industrial manufacturing can be done, by making the process more efficient. Consulting firm Wohlers Associates expects the 3D printing industry to expand to more than $100 billion by 2032. 

3D printers can make objects from a variety of materials such as plastics, metal and cement, using a digital design as a guide. The combination of Stratasys and Desktop Metal will have more than 27,000 industrial customers across a range of sectors including aerospace, automotive, consumer products and health care. 

The two companies expect about $50 million of annual run-rate cost savings by 2025, according to the statement. The transaction is expected to close in the fourth quarter, subject to approval from both companies’ shareholders as well as regulatory and government clearances. 

JPMorgan Chase & Co. advised Stratasys on the deal, while Desktop Metal worked with Stifel Financial Corp. 

Desktop Metal, based in Massachusetts, went public in 2020 in a deal with a special purpose acquisition company sponsored by former cable executive Leo Hindery Jr. Kleiner Perkins, NEA and Alphabet Inc. are among its largest shareholders, according to data compiled by Bloomberg.

Stratasys, headquartered in Minnesota and Israel, has been rebuffing recent takeover overtures from 3D printer rival Nano Dimension Ltd.

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