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Lexmark Acquired by Apex Technology and PAG Asia Capital

Financial Information
  • Enterprise Value                                         $3.6 Billion
  • EV/Revenue                                               1.0x
  • EV/EBITDA                                                 9.0x

Transaction Facts

  • Lexmark (NYSE:LXK) announced today that it has entered into a merger agreement with buyers including Apex Technology, PAG Asia Capital and Legend Capital.
  • Publicly traded on the Shenzhen Stock Exchange (002180.SZ), Apex Technology designs, manufactures and markets inkjet and laser cartridge components. PAG is one of Asia’s largest private equity firms and Legend Capital is a division of Legend Holdings, one of the largest diversified holding operations in China.
  • The transaction caps a process that began in October 2015 when the company announced it was exploring strategic alternatives following media reports. The company has seen its share price drop almost 20 percent in the past year.

Using M&A To Complete Transition

  • Beyond Hardware: Lexmark has aggressively moved beyond the hardware space, completing several acquisitions in the software space and bolstering its services revenue. The company began as IBM’s low-end desktop printing division before being sold to a buyout firm in 1991 and has steadily worked to decrease its reliance on the competitive printing business.
  • Would Have, Could Have?: Lexmark’s difficulties pale in comparison to those of original parent IBM, which yesterday announced its lowest revenue in 14 years. IBM has sold off several divisions that once were market leaders, and despite its own vaunted comeback effort has struggled to once again achieve prime position.
  • Chinese Buyers Step Into International Spotlight: This is the latest high-profile cross-border deal with a Chinese buyer. In February, Ingram Micro announced that it was being acquired for $6 billion by Tianjin Tianhai, a division of Chinese conglomerate HNA Group. Also in February China National Chemical Corp. announced the acquisition of Swiss pesticide and seed company Syngenta for $43 billion. Chinese activity, driven by low domestic growth, has helped offset a slower start for 2016 M&A.
  • Going Private: As IPOs diminish in frequency, we’re seeing the opposite trend take hold – large public companies are exploring going private either to complete a transition or simply remove themselves from the rigorous quarterly reporting schedule mandated by Wall Street. Lexmark joins data analytics firm Informatica and cloud software company Cvent in taking this path.
For more information about this transaction, click here to read the press release.
martinwolf was not the advisor in this transaction.
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