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Chinese consortium snaps up Lexmark in US$3.6 billion deal

21 Apr 16

United States printer manufacturer Lexmark is being acquired by a Chinese consortium in a US$3.6 billion deal.

The company has entered into a definitive merger agreement with a consortium of investors, lead by Apex Technology and private equity company PAG Asia Capital. Venture capital company Legend Capital Management is also a member of the consortium.

Apex Technology makes inkjet and laser cartridge components, along with other electrical equipment and components.

Lexmark says the deal, which is expected to be finalised in the second half of 2016, is ‘the result of a thorough review of strategic alternatives’ to maximise value for shareholders and ‘unlock the company’s intrinsic value’.

The company had been looking at alternatives, including a possible sale, since last October. The acquisition price of $40.50 a share is a 30% premium on its October 21 closing price.

“[The] agreement enables Lexmark’s continued focus on strategic initiatives while strengthening access to substantial market opportunities in Asia,” the printer vendor says.

Paul Rooke, Lexmark chairman and chief executive officer, says “With the consortium’s resources, we will be able to continue to invest in and growth the business to more fully penetrate the Asia Pacific market for hardware, software and managed print services.

“As part of the consortium, Lexmark will be able to reach the next level of growth and innovation, to the benefit of our customers, business partners and suppliers, faster than we could achieve on our own,” Rooke says.

The company says its two business groups, Imaging Solutions and Services and Enterprise Software, are expected to continue ‘unaffected’, as are the company’s regional and country operations, with Lexmark saying all areas are expected to benefit strategically and financially from the transaction.

Jean-Paul Montupet, Lexmark board of directors lead director, says the transaction is not expected to cause any disruption to Lexmark’s operations or its ongoing cost savings initiatives ‘and will only strengthen the business’.

Lexmark will retain its current corporate headquarters in the United States and Rooke is expected to continue to lead the business after the transaction closing.

The deal has been unanimously approved by Lexmark’s board of directors.

Earlier this year China’s HNA Group snapped up Ingram Micro in a $6 billion deal.

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