Lexmark sale to go ahead for $2.54 billion
Lexmark has agreed to be sold for $2.54 billion to Chinese companies Apex Technology and PAG Asia Capital.
Announced on Tuesday, the all-cash transaction is valued at $3.6 billion, or $40.50, when the ailing printer manufacturer's debt levels are taken into account.
The deal is taking place approximately seven months after Lexmark revealed that the company was pursuing strategic alternatives for the business due to poor shareholder value.
Lexmark encompasses a printer manufacturing and supply business, services and an enterprise unit, but as consumers shift beyond the traditional PC model and move towards mobile devices -- and standard printers are being left in the dust -- the US firm has struggled to maintain a strong business position.
In Q4 2015, Lexmark reported revenue of $969 million, with earnings per share of -$0.17.
Reports of a potential acquisition surfaced last month, with Guangdong, China-based Apex named as a potential buyer. However, the announcement has shown that it is a consortium of investors from both Apex and PAG which are taking on Lexmark, which will remain headquartered in Lexington, Ky.
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Under the terms of the deal, Lexmark CEO Paul Rooke will stay at the helm until the acquisition has closed.
The transaction has been unanimously approved by Lexmark's board and represents a 30 percent premium on Lexmark's stock price in October 2015, before news of the strategic alternatives went public.
When the deal has been completed, Lexmark's common stock will be removed from the NYSE.
Jean-Paul Montupet, lead director of the Lexmark Board of Directors, commented:
"This transaction represents the culmination of an extensive review process by the Board of Directors and the next step in Lexmark's growth and transformation.
We anticipate that the transaction will cause no disruption to our operations or our ongoing cost-savings initiatives, and will only strengthen the business."
The acquisition is expected to close in the second half of 2016.
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