The drama continues surrounding a shareholder vote on a proposed Stratasys acquisition that would expand the breadth of its products.

The crucial vote at the meeting Thursday comes as the 3-D printing industry is at a crossroads.

As the industry gains speed and consolidation continues this summer, Stratasys has had two aggressive unsolicited offers, one from its biggest shareholder. The company has rejected both, instead favoring its own deal to acquire Massachusetts company Desktop Metal.

Stratasys, which is registered in Rehovot, Israel, but also has a headquarters in Eden Prairie, is a pioneer in the 3-D printing or additive manufacturing space and specializes in equipment that utilizes a variety of plastic resins.

Once primarily used to print plastic prototypes, the industry as a whole has moved to more advanced technologies using more and more materials including metals. The industry has evolved to produce machines that can make production-quality parts at scale for manufacturers. That has led the 3-D manufacturing companies to try to build scale and expand product breadth.

"To achieve that scale, it's thought that consolidation is necessary so that 3-D printer manufacturers can produce at the level necessary for these major manufacturers," said Michael Molitch-Hou, editor of, which follows the additive manufacturing industry. "Because there is an economic slump, there's extra incentive for these deals to take place."

Stratasys says its deal to buy Desktop Metal, based in Burlington, Mass., is the best way to achieve breadth. Desktop Metal has annual revenue of $209 million, and its machines work with more than 250 different materials including metal and polymers to ceramics and composites.

On May 25, Stratasys announced a $552 million deal to acquire Desktop. Stratasys was an early investor in Desktop Metal, but if Stratasys withdraws from the deal, there's a $32.5 million penalty.

That announcement came after Nano Dimension, Stratasys' largest shareholder, announced an unsolicited partial tender offer to take control of Stratasys. The board rejected the initial offer and several after that.

Nano Dimension, based in Ness Ziona, Israel, holds 14% of Stratasys shares and withdrew its tender offer when it looked like it could not get shareholder support.

The second company after Stratasys, 3D Systems of Rock Hill, S.C., offered $1.2 billion. It sweetened its bid several times before Stratasys' board agreed to engage with talks. Ultimately, 3D Systems last offer also was rejected.

Back-and-forth claims between Nano Dimension, 3D Systems and Stratasys have become extraordinarily personal with claims of mismanagement and value destruction.

Complicating the valuations of the various deals is that the share value of all four companies have declined since March. 3D Systems' share price has dropped nearly half, and Desktop Metals has declined by a third.

Now the drama has rolled into the arguments in front of shareholders for the Thursday vote.

Nano Dimension publicly stated it will not vote for the Desktop Metal deal. The Donerail Group, another major shareholder with 2.3% of Stratasys stock, also said it will vote no on the Desktop Metal deal.

Combined, Nano Dimension and the Donerail Group control more than 16% of Stratasys shares. That's a sizable vote total for Stratasys to overcome.

Add to those declarations reports by proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis also recommending a no vote.

Proxy advisory firms generally weigh in on shareholder proposals at a public company's annual meeting but don't often suggest votes against a company. While there's no reason for shareholders to take their recommendations, an independent third-party analysis can be hugely influential.

"While the proposed transaction [for Desktop Metal] does not appear to be value-destructive, it is not clear that it creates value for [Stratasys] shareholders," ISS wrote in a 21-page report. "[3D Systems'] alternative offer to acquire the company, by contrast, presents a more convincing route to value creation for SSYS shareholders."

Glass Lewis acknowledges that while its analysts generally believe the management and board of a company are best equipped to make decisions regarding corporate strategy, "we believe the most recent 3D Systems offer warrants further evaluation by the Stratasys board and that it would not be in shareholders' best interests to approve the Desktop Metal merger at this time in light of the outstanding competing interest and recent developments."

While the fate of Stratasys' offer for Desktop Metal will be determined at the special shareholder meeting on Thursday in Israel, speculation about the future of Stratasys, Desktop Metal and 3D Systems is likely to continue.

"I think it's still possible for all three companies to merge," Molitch-Hou said.