NEW YORK - Shapeways Holdings, Inc. (NASDAQ: SHPW), a key player in the digital manufacturing sector, announced Monday its agreement to sell its software division to OTTO dms, Inc., a company owned by Shapeways' CEO Greg Kress and software executive Greg Rothman. The transaction, which involves the sale of the OTTO and MFG software assets, is expected to close by May 20, 2024, subject to standard closing conditions.
The divestiture follows a strategic review by Shapeways, advised by independent consultants, which included exploring options for the company's assets. Market feedback indicated interest in purchasing the company's manufacturing and software businesses separately, leading to the formation of a Special Committee by the Shapeways Board of Directors to oversee the sale or liquidation of its software operations.
The sale does not include Shapeways' proprietary InShape software, which is integral to the company's manufacturing workflow. Post-transaction, Kress will continue as CEO of Shapeways, while Rothman is expected to lead the newly independent software company.
Shapeways' search for strategic alternatives for its manufacturing business continues, with ongoing discussions with potential buyers. There is no guarantee that these talks will result in a transaction.
About Shapeways: Shapeways is a global leader in digital manufacturing. It leverages a blend of additive and traditional manufacturing technologies, complemented by proprietary software to aid other manufacturers and their customers in reducing costs and improving supply chains. The company has delivered over 24 million parts to a client base that spans more than 180 countries.
The forward-looking statements in this press release, such as the anticipated closing date of the transaction and the company's ongoing search for strategic alternatives, are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially.
This news is based on a press release statement from Shapeways, Inc.
InvestingPro Insights
In light of Shapeways Holdings, Inc.'s (NASDAQ: SHPW) recent announcement to sell its software division, an analysis of the company's financial health and market performance can provide additional context for investors considering the implications of this strategic move. According to InvestingPro data, Shapeways is currently grappling with a challenging financial landscape. The company's market capitalization stands at a modest $10.12 million, reflecting the market's assessment of its value. With a Price / Book ratio of 0.38 as of the last twelve months ending Q4 2023, the company is trading at a low valuation relative to its book value, which could signal an undervaluation of its assets.
However, Shapeways is not without its challenges. The company has been quickly burning through its cash reserves, which is a concern that investors should not overlook. This is further evidenced by the company's operating income margin, which was at a steep negative 90.58% for the same period, indicating that the company is far from reaching profitability in its operations. Additionally, the stock has experienced a significant decline, with a 1-month price total return of -19.05% and a 6-month total return of -32.0%, suggesting a bearish trend in investor sentiment.
InvestingPro Tips for Shapeways highlight several key points for potential investors. The company holds more cash than debt, providing some liquidity cushion, and liquid assets exceed short-term obligations, which may offer some financial stability in the near term. However, analysts do not anticipate Shapeways will be profitable this year, and the stock has fared poorly over various time frames, including the last month, six months, and even over the last decade. With these factors in mind, investors may want to consider the breadth of insights available on InvestingPro, which lists an additional 13 tips for Shapeways at https://www.investing.com/pro/SHPW. To access these insights, readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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