Xerox has agreed to acquire Kentucky-based Lexmark International from Ninestar Corporation, PAG Asia Capital, and Shanghai Shouda Investment Centre in a deal valued at $1.5 billion, including assumed liabilities. Xerox expects to finance the acquisition with cash and committed debt financing.
This acquisition will strengthen the Xerox core print portfolio and build a broader global print and managed print services business that is better suited to meet the evolving needs in the hybrid workplace.
Lexmark, a valuable partner and supplier to Xerox, is a leading provider of imaging solutions and technologies, including an advanced line of printers and multifunction printers. By combining Lexmark’s solutions with Xerox ConnectKey technology and advanced Print and Digital Services, the deal will create a superior offering portfolio and validate Xerox’s commitment to increasing value for clients and partners.
Xerox and Lexmark have complementary operations, providing strengths and end-market exposures. Combined, the companies form a vertically integrated manufacturer, distributor, and provider of print equipment and MPS, covering all geographies and client types with a well-rounded portfolio of print and print services offerings.
Lexmark is a leader in the large, growing A4 color print and supplies market and has an opportunity to expand its OEM platform within the A3 equipment category. And once combined, Xerox expects to have a more comprehensive portfolio of products to enhance its offerings and reinforce its value proposition to clients, enabling growth across the portfolio of equipment and MPS and incremental opportunities to increase penetration of its advanced Digital Services and IT Solutions.
This deal is expected to be immediately accretive to earnings per share and free cash flow. Xerox expects this transaction to accelerate the realization of its Reinvention financial targets of revenue stabilization and double-digit adjusted operating income through an improved competitive position and exposure to faster-growing segments within print and over $200 million of identified cost synergies to be realized within two years of transaction close.
The Xerox Board of Directors unanimously approved the transaction. The deal is subject to regulatory approvals, approval of Ninestar’s shareholders, and other customary closing conditions. It is expected to close in the second half of 2025. Until then, Xerox and Lexmark will maintain their current operations and operate independently.
The deal will also strengthen Xerox’s ability to serve clients in the large, growing A4 color market and diversify its distribution and geographic presence, including in the APAC region. The new organization will serve over 200,000 clients in 170 countries with 125 manufacturing and distribution facilities in 16 countries. Lexmark and Xerox have a top five global share in each of the entry, mid and production print markets and are key players in the large, stable managed print services market.
Jefferies is working as the financial advisor to Xerox and Citi is also providing financial advice. Ropes & Gray and Willkie Farr & Gallagher are working as legal advisors to Xerox. Morgan Stanley is working as financial advisor to Lexmark and Strait Capital Management is working as financial advisor to Ninestar Corporation. Dechert is working as legal advisor to Lexmark, as well as Ninestar, PAG Asia Capital and Shanghai Shouda Investment Centre and King & Wood Mallesons is working as PRC counsel to Ninestar.
KEY QUOTES:
“Our acquisition of Lexmark will bring together two industry-leading companies with shared values, complementary strengths, and a deep commitment to advancing the print industry to create one stronger organization. By combining our capabilities, we will be better positioned to drive long-term profitable growth and serve our clients, furthering our Reinvention.”
“Our shared values and vision are expected to streamline operations and drive efficiencies, taking the best of both companies to make it easier to do business with Xerox.”
- Steve Bandrowczak, chief executive officer at Xerox
“Lexmark has a proud history of serving our customers with world-class technology, solutions and services, and we are excited to join Xerox and expand our reach with shared talent and a stronger portfolio of offerings. Lexmark and Xerox are two great companies that together will be even greater.”
- Allen Waugerman, Lexmark president and chief executive officer
