Desktop Metal (NYSE:DM), which combined with Trine Acquisition Corporation in December 2020, announced it was headed into a new combination this morning as it has agreed to be absorbed an all-stock merger with peer Stratasys that would value it at about $1.88 per share.

Shareholders in the de-SPAC are expected to own about 41% of the combined company at close after receiving 0.123 Stratasys shares for each Desktop Metal share they hold. Stratasys last closed at $15.26 and so the price represents a slender 7.4% premium over Desktop Metal’s last closing price of $1.75.

This is a steep fall from Desktop Metal’s de-SPAC zenith as it hit a high of $34.94 in February 2021 when excitement around SPACs was at a fever pitch. But, its own delays in hitting commercialization goals began sinking its stock soon after, and the company has traded below $10 since July of that year.

This has of course been compounded by the changing appetites of the market away from growth and tech; towards cash and stability. So, while this deal may not be a short-term bonanza for Desktop Metal investors, there could be significantly more upside in the combined company.

The parties estimate the merger could drive about $50 million in cost synergies and another $50 million in revenue synergies. The deal also could also offer a much more stable bridge to profitability for Desktop Metal.

Statasys has already achieved consistent positive EBITDA with $7 million generated in the first quarter of 2023, while Desktop Metal reported a -$24.4 million EBITDA loss in the same period despite recent cost-cutting efforts.

Together, the two companies are expected to generate $885 million in revenue in 2023, with Stratasys accounting for $650 million (73.4%) of this amount. The parties also project the combined company to hit EBITDA margins of 10%-12% in 2025 and the pair have a combined $437 million cash on hand to help get there.

There also is still the possibility of bigger cash value in the offing as well.

Before announcing this deal, Stratasys had fended off multiple bids from its largest shareholder, Nano Dimension, to increase its stake to a majority position and Nano increased this to a hostile $18 all-cash offer also this morning.

This would be a 20.9% premium to Stratasys’ last trading price, but the twin news of its Desktop Metal merger and the bid have pushed it to $15.45 in the pre-market. That narrows the premium to 16.5%, while boosting the value of shares Desktop Metal investors are to receive to $1.90.

At $18, Desktop Metal’s compensation rises to $2.21 per share, a 26.5% premium over its last close. Of course, if Desktop Metal shareholders are to be issued enough equity to make up a 41% stake, then Nano would need to scoop up more shares to finish in a majority as well.

The parties do not expect the Desktop Metal/Stratasys merger to be completed until the fourth quarter so there is still time for these various moving parts to play out.