Lexmark Finds a Suitor

Following months of uncertainty and an exhaustive ‘strategic alternatives’ review, Lexmark International is being acquired by a Chinese consortium led by cartridge manufacturer Apex Technology Co., Ltd. and private equity firm PAG Asia Capital (PAG), including an investment firm Legend Capital Management. Lexmark was spun out from IBM in 1991, went public in 1995, acquired 13 software companies between 2010-2015 for over $2 billion, and had various firms negotiating for its assets including Konica Minolta, Canon, Ricoh, Lenovo, and others.

In 2013 BlueMountain Capital, a $13.6 billion hedge fund bought Lexmark shares and at that time said it would seek to discuss “strategic alternatives” with Lexmark and was “focused on delivering value to all stockholders.” This was probably the impetus for Lexmark seeking strategic alternatives including its sale.

Immediately after the announcement no fewer than nine law firms announced various investigations such as examining whether “Lexmark’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects” or other investigations whether the “Lexmark board of directors is fulfilling its fiduciary duties, maximizing the value of the Company, disclosing all material benefits and costs, and obtaining full and fair consideration for Company stockholders.” These are common when a public company is sold.

Implications are many for the imaging industry. Photizo Group will publish a report in the near future including Lexmark’s history, current situation, Apex Technology, implications, and a view to the future.

 

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