Printer manufacturer, Lexmark International, has been sold to a Chinese-based consortium for $US3.6 billion.
Lexmark aannounced it had entered into a definitive merger agreement with a consortium of investors led by Chinese manufacturer and marketer of inkjet and laser cartridge components , Apex Technology Co. Ltd. (Apex), and PAG Asia Capital (PAG), under which Lexmark will be acquired for $40.50 per share in an all-cash transaction. Legend Capital Management Co., Ltd. (Legend Capital) is also a member of the Consortium.
The transaction has been unanimously approved by Lexmark's Board of Directors and represents a 30 per cent premium to Lexmark's undisturbed closing stock price on October 21, 2015, the date prior to the news of Lexmark's exploration of strategic alternatives becoming public.
Lexmark said in a statement that the transaction was the result of a thorough review of strategic alternatives undertaken by Lexmark's Board of Directors, 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, Kentucky. Lexmark chairman and CEO, Paul Rooke, is expected to continue to lead Lexmark after the transaction closes.
"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," Rooke said. "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.
"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."
"Lexmark's passion for excellence and unwavering commitments to customers, employees and communities represent a tremendous cultural fit," Apex Technology chairman, Jackson Wang, said.
"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."
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.Read more: Lexmark International names EMPR as new distributor
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.
Lexmark's Board of Directors also declared its regular quarterly cash dividend of $US0.36 per share of Lexmark Class A Common Stock. The dividend is payable on June 17, 2016, to shareholders of record as of the close of business on June 3, 2016.
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. The company was founded in 2004 and is headquartered in Zhuhai, Guangdong, China. Apex is listed on the Shenzhen Stock Exchange (002180). Zhuhai Seine Technology Co., Ltd., ("Seine"), is the largest shareholder of Apex holding approximately 70 per cent of the voting shares of Apex. Apex shareholders also control Pantum International, China's first printer and printing solutions provider.
PAG Asia Capital
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. Founded in 2002, PAG currently has US$15 billion in capital under management, with 380 staff across Asia.
Legend Capital is the venture capital arm of Legend Holdings (SEHK:3396), one of the largest diversified holding corporations in China, and has been a shareholder of Seine since 2007. It focuses on China-related innovation and growth opportunities, and has been investing in the technology sector for the past 15 years.
Lexmark (NYSE: LXK) creates enterprise software, hardware and services that remove the inefficiencies of information silos and disconnected processes, connecting people to the information they need at the moment they need it. Open the possibilities at www.Lexmark.com.
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