Office machine giant Lexmark has been acquired and taken private by China-based computer hardware company Apex technology and investment management firm PAG Asia Capital along with Participation from Legend Capital Management. The group of investors are planning to acquire Lexmark in an all-cash deal worth roughly $3.6 billion once the deal is approved by the US Committee on Foreign Investment in the United States (CFIUS).
Lexmark International Inc. announced that it entered a definitive merger agreement unanimously approved by Lexmark’s Board of Directors. Lexmark will be acquired for $40.50 per share, and represents a 30% premium to Lexmark’s undisturbed closing stock price on October 21, 2015.
What becomes of Lexmark office machine growth
The agreement made between the parties will enable Lexmark to strengthen their access to substantial office machine market opportunities in Asia while remaining headquartered in Lexington, Kentucky. Lexmark’s two business groups, Imaging Solutions, and Services and Enterprise Software will benefit strategically and financially by this purchase while maintaining their regular processes.
Like its competitors, Lexmark has been struggling as more firms move to a digital workplace. Lexmark said it was exploring strategic alternatives to enhance shareholder value and after a long review of alternatives found this opportunity to be the best going forward. Paul Rooke, chief executive of Lexmark, sees this takeover as a chance to “reach the next level of growth and innovation.”
Questions about the new Apex-Lexmark relationship
Although their processes are slated to be the same in the North American market, we can’t help but wonder what will become of Lexmark’s established office machine equipment in the market. It can be said that Apex will now have access to Lexmark’s extensive assets, providing them the opportunity to expand its product portfolio and leverage the new assets it has acquired.
Apex’s key shareholder Zhuhai Seine Technology is one of the world’s largest aftermarket cartridge makers, and with access to the Lexmark knowledge base, they too will be able to build their brand with the assets to try and take a dominant position among aftermarket producers.
In recent years, Lexmark has made a big push into the business software and digital document management services, so it’ll be interesting to see what direction this acquisition will point them in. The deal is expected to close in the second half of the year if it is approved by regulators. “Lexmark’s passion for excellence and unwavering commitments to customers, employees and communities represent a tremendous cultural fit,” said Jackson Wang, Apex Technology chairman, only time will tell how good of a business fit this deal is.
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