Chinese group acquiring Lexmark for $3.6 billion
BOULDER — Lexington, Ken.-based Lexmark International Inc. (NYSE: LXK), the printer manufacturer that employs 200 people at its development and manufacturing facility in Boulder, has agreed to be acquired by a Chinese consortium led by Apex Technology for $3.6 billion in an all-cash transaction.
Apex Technology, which is listed on China’s technology-focused Shenzhen Composite, PAG Asia Capital, a Hong Kong-based asset manager and Beijing-headquartered venture-capital firm Legend Capital Management have offered $40.50 in cash per Lexmark share. The deal will be financed through a combination of equity contributions by the consortium and debt. It is expected to be completed in the second half of this year.
Workers in Boulder make toner and photoconductor drums for use in laser-printer cartridges. They also perform tests, and design and develop new technology at 6555 Monarch Road, west of IBM’s campus at Colorado highways 119 and 52.
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The consortium said it intends to keep Lexmark’s corporate headquarters in Lexington and Lexmark’s two business groups, Imaging Solutions and Services and Enterprise Software. The company’s regional operations are expected to continue unaffected and benefit strategically and financially from the transaction, according to a company statement.
Lexmark officials in Boulder did not immediately return calls requesting a comment.
Lexmark’s board of directors unanimously approved the offer, which represents a 16.8 percent premium to the company’s Tuesday close in New York of $34.66. It also represents a 30 percent premium to its closing stock price on Oct. 21 prior to the news of Lexmark’s exploration of strategic alternatives becoming public,” the company said in a statement.
In after-hours trading Tuesday, Lexmark shares were up 11.3 per cent at $38.57 and were at $38.12 mid-day Wednesday.
“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,” Paul Rooke, Lexmark’s chairman and chief executive, said in a prepared statement. “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.
Rooke will continue to run Lexmark from Lexington. Last year, the company cut approximately 1,100 positions worldwide in a restructuring, with some of the jobs to be shifted to lower-cost countries. The restructuring was expected to save Lexmark $67 million in 2016 and $100 million beginning in 2017.
In February earnings reports, the company said quarterly revenue was down more than 5 percent, but the gross profit margin rose from 35.2 percent to 39.8 percent. Earnings per share were up slightly in 2015.
The acquisition still must be approved by Lexmark shareholders, receive regulatory approval in the United States including the Committee on Foreign Investment, China and certain other foreign jurisdictions, and other customary closing conditions.Upon the close of the transaction, Lexmark’s common stock will cease to be publicly traded on the New York Stock Exchange.
