Xerox Completes $1.5B Acquisition of Lexmark

By Ahmed Jameison • Thursday, July 03 12:01 • Permanent Link

Xerox Holdings Corporation has completed its acquisition of Lexmark International, Inc. from Ninestar Corporation, PAG Asia Capital, and Shanghai Shouda Investment Centre for a total of $1.5 billion, including assumed liabilities. This acquisition is a significant move for Xerox as it aims to strengthen its position in the printing industry and deliver innovative workplace solutions in the evolving hybrid environment.

The combined organization will now serve over 200,000 clients in more than 170 countries and operate 125 manufacturing and distribution facilities in 16 countries. As a result of the acquisition, Xerox now stands among the top five in every major print segment and is the market leader in managed print services. The company anticipates the transaction to be accretive to 2025 adjusted earnings per share and free cash flow, resulting in a lower level of pro forma gross debt leverage.

The acquisition was financed through a combination of cash on hand and debt financing. Xerox expects $238 million of transaction-related synergies to contribute over $1 per share of additional adjusted EPS accretion by the end of the second year following the transaction close.

Following the close of the acquisition, Steve Bandrowczak will continue as the CEO of Xerox, leading an executive team comprised of Xerox and Lexmark leaders. The unified leadership team is structured to accelerate innovation and scale, leveraging the deep talent bench from both companies.

This acquisition further strengthens Xerox's core business by adding exposure to growing parts of the print market, manufacturing capacity, and expanding distribution reach. It is expected to improve the mix of revenue from growing markets and enable long-term growth in operating profit through structural simplification.

Jefferies LLC served as the financial advisor to Xerox, while Citi provided financial advice. Ropes & Gray LLP and Willkie Farr & Gallagher LLP served as legal advisors to Xerox. On the other hand, Morgan Stanley & Co. LLC served as the financial advisor to Lexmark, and Strait Capital Management advised Ninestar Corporation. Dechert LLP served as the legal advisor to Lexmark, Ninestar Corporation, PAG Asia Capital, and Shanghai Shouda Investment Centre, and King & Wood Mallesons served as PRC counsel to Ninestar Corporation. Following these announcements, the company's shares moved 1.95%, and are now trading at a price of $5.75. If you want to know more, read the company's complete 8-K report here.

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