Lexmark to Be Sold for $2.54 Billion
April 20 2016 - 1:40AM
Dow Jones News
Lexmark International Inc. agreed to be sold to a group of
buyers including China-based Apex Technology Co. and Asia-focused
PAG Asia Capital for $2.54 billion.
The companies said the deal—which pays Lexmark $40.50 a share, a
17% premium to the closing price Tuesday—had an enterprise value of
about $3.6 billion when including Lexmark's debt.
The Wall Street Journal reported in October that the maker of
printers, enterprise software and hardware was exploring
alternatives including a possible sale. The deal provides a 30%
premium to the closing price on the day before the Journal
report.
Chinese buyers have been active in overseas deal activity this
year. Analysts have attributed the trend to factors including a
slowing Chinese economy, and a weakening yuan that may be spurring
deals before a further decline reduces buying power.
Technology distributor Ingram Micro Inc. agreed to a $6 billion
offer from a unit of Chinese conglomerate HNA Group, while China
National Chemical Corp. reached a $43 billion deal for Swiss
agriculture firm Syngenta AG.
Lexmark shares were up 12% in late trading to $38.97.
The consortium also includes Legend Capital, the venture-capital
arm of China-based Legend Holdings.
Apex makes inkjet and laser cartridge components.
PAG Asia Capital is the private-equity business of PAG, an
investment firm that also has real estate and absolute return
strategies.
Lexmark, which posted $3.55 billion of revenue last year, has
gone on an acquisition spree, snapping up a number of software
assets, to lessen its dependence on the fiercely competitive
printing business and move more toward services and software.
The company, like others in the technology industry, has spent
years wrestling with a maturing hardware market.
In February, it said it would eliminate about 550 jobs over 12
months, around 4% of its workforce.
On Tuesday, Lexmark said "this is an exciting transaction" that
the board "believes is in the best interests of our shareholders
following an exhaustive strategic alternatives review process to
maximize value."
Lexmark will remain in Lexington, Ky., and Chairman and Chief
Executive Paul Rooke is expected to continue leading Lexmark after
the deal closes.
The sale is expected to close during second half of the year. It
is subject to regulatory approvals including the Committee on
Foreign Investment.
Lexmark was International Business Machine Corp.'s low-end
desktop printing division before the business was sold to buyout
firm Clayton Dubilier & Rice in 1991.
Write to Josh Beckerman at josh.beckerman@wsj.com
(END) Dow Jones Newswires
April 20, 2016 01:25 ET (05:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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