Lexmark's Buyout By Chinese Consortium Completed

The acquisition of printer and imaging products manufacturer, Lexmark International Inc. by a Chinese consortium was closed yesterday.

On Apr 19 this year, Lexmark agreed to be acquired by the consortium led by Apex Technology Co., Ltd. (Apex) and PAG Asia Capital (PAG) for $3.6 billion or $40.50 per share in cash. Legend Capital Management Co., Ltd. (Legend Capital) was also one of the buyers. In Oct 2016, Lexmark revealed in an SEC filing that the Committee on Foreign Investment in the United States (CFIUS) has approved its proposed buyout by the Chinese consortium.

The closure of the acquisition came after Lexmark shareholders’ unanimous approval, clearance by China's State Administration of Foreign Exchange and fulfillment of all other customary closing conditions. Shares of Lexmark common stock have stopped trading on the New York Stock Exchange. Since the announcement of this acquisition, shares of Lexmark have gone up 16.8%.

The Goldman Sachs Group, Inc. (NYSE:GS) served as the exclusive financial advisor to Lexmark, while Wachtell, Lipton, Rosen & Katz constituted its legal counsel.

Post Integration

According to Lexmark, the integration is fully aligned with the company’s mission of alleviating pain, restoring growth and opportunity, and addressing customers’ need while providing new prospects for employees. The transaction is expected to meaningfully accelerate growth strategies for Lexmark’s hardware, software and managed print services solution by expanding the business in the Asia Pacific region.

Upon the completion of the transaction, David Reeder became the President and chief executive officer (CEO) of Lexmark. Reeder, who spent his entire career in technology, replaced Lexmark’s Chairman, and CEO, Paul Rooke who has worked at Lexmark for around 25 years.

According to Rooke, Lexmark chairman and chief executive officer, "We are excited to have completed the transaction, which provides significant cash value to our shareholders, benefits our customers and provides new opportunities for our employees."

LEXMARK INTL Price

LEXMARK INTL Price | LEXMARK INTL Quote

Last Words

The Chinese consortium is expected to benefit from Lexmark’s hardware, software and managed print services Also, Lexmark provides complete digital printing solutions including inkjet and laser printers, multi-function products (MFP), photo printers and associated supplies and services for both office and home use. The company also sells dot matrix printers, which print single and multipart forms for business users, and offers a broad range of imaging products for offices.

Lexmark’s third-quarter results were not very encouraging. Though earnings increased on a year-over-year basis, revenues decreased primarily due to a strong U.S. dollar and the ongoing exit of the company from the Inkjet business.

In our opinion, the recent acquisition deal would be beneficial for Lexmark given that fact that it has been struggling amid changing industry dynamics.

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