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Lexmark will be acquired for $3,6-billion by a consortium of investors led by Apex Technology and PAG Asia Capital, and including Legend Capital Management.
The transaction has been unanimously approved by Lexmark’s board of directors and represents a 30% premium to Lexmark’s undisturbed closing stock price on 21 October 2015, the date prior to the news of Lexmark’s exploration of strategic alternatives becoming public.
The transaction is the result of a thorough review of strategic alternatives undertaken by Lexmark’s board, with the assistance of outside advisors, to maximise value for shareholders and unlock the company’s intrinsic value.
The consortium intends to maintain Lexmark’s corporate headquarters in Lexington. Paul Rooke, chairman and CEO of Lexmark, is expected to continue to lead Lexmark after the transaction closes.
Lexmark’s two business groups, Imaging Solutions and Services and Enterprise Software, as well as the company’s regional and country operations, are expected to continue unaffected and benefit strategically and financially from the transaction.
The merger will be financed through equity contributions by the consortium and debt financing. The merger is not subject to a financing condition.
Upon the close of the transaction, Lexmark’s common stock will cease to be publicly traded on the New York Stock Exchange.
The merger, which is expected to close in the second half of 2016, is subject to approval by Lexmark shareholders, regulatory approvals in the US, including the Committee on Foreign Investment, China and certain other foreign jurisdictions, and other customary closing conditions.
“This is an exciting transaction that Lexmark’s board of directors believes is in the best interests of our shareholders following an exhaustive strategic alternatives review process to maximize value,” says Rooke. “The transaction will benefit our customers and provide new opportunities for our employees.
“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,” he adds. “With the consortium’s resources, we will be able to continue to invest in and grow the business to more fully penetrate the Asia Pacific market for hardware, software and managed print services.”
Jean-Paul Montupet, lead director of the Lexmark board, says: “This transaction represents the culmination of an extensive review process by the board 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.”
“Lexmark is a recognized global leader in printing technology and enterprise software, with a proven track record of performance, a consistent annuity-based business model and a talented workforce,” says Weijian Shan, group chairman and CEO of PAG. “We look forward to working with Lexmark’s management team and focusing on expanding the business in the Asia Pacific region.”
“Lexmark’s passion for excellence and unwavering commitments to customers, employees and communities represent a tremendous cultural fit,” says Jackson Wang, Apex Technology chairman. “We are excited to work alongside Lexmark as it continues to invest in advanced technologies and solutions to best serve its customers and business partners while simultaneously pursuing additional untapped opportunities for future growth.”
Apex Technology designs, manufactures, and markets inkjet and laser cartridge components for remanufacturers and distributors and is the largest manufacturer and solution provider for the global aftermarket imaging supplies channel.
PAG Asia Capital is the private equity buyout arm of PAG, one of Asia’s largest private equity firms with funds under management across private equity, real estate and absolute return strategies.
Legend Capital is the venture capital arm of Legend Holdings, one of the largest diversified holding corporations in China.