On April 19th 2016, Lexmark International, Inc. announced that it had entered into a definitive merger agreement. They entered this agreement with a consortium of investors that were helmed by Apex Technology Co. and PAG Asia Capital. These business technology companies have changed the landscape. To learn more about the details of this merger and the money involved read on.
The Numbers Behind The Lexmark Merger
Apex Technology Co. and PAG Asia Capital acquired Lexmark for $40.50 per share in an all cash transaction. This transaction had an enterprise value of approximately $3.6 billion net of cash. Legend Capital was also a member of this consortium.
What Led Up To This Decision On Lexmark’s Part?
This major transaction was actually unanimously approved by Lexmark’s board of directors. It shows a 30 percent premium in regards to Lexmark’s undisturbed closing stock price on Oct. 21, 2015. This date was before the news of Lexmark’s interest and research into strategic alternatives for the company become public knowledge. The transaction is the result of a complete and exhaustive review of strategic alternatives undertaken by Lexmark’s Board of Directors. This occurred with the assistance and expertise of outside advisors, with the intention of maximizing value for shareholders and unlocking the company’s intrinsic value in the most effective way.
What Does This Mean For Lexmark?
The consortium seeks to keep Lexmark’s corporate headquarters where they have always been, in Lexington, Kentucky. Paul Rooke, who is the chairman and chief executive officer of Lexmark, is expected to continue to lead Lexmark into the future, even after the transaction closes, leading to no major shifts on these fronts. Lexmark’s two business groups, Imaging Solutions and Services and Enterprise Software, are expected to continue on in their current capacities, and to benefit both strategically and financially from these decisions. The same goes for the regional and country operations of Lexmark.
What Does This Mean For Investors?
When this exchange closes, as it’s supposed to do by the end of 2016, Lexmark’s stock will no longer be traded publicly on The New York Stock Exchange. The closing of the exchange, however, is subject to a number of conditions. These include the approval of Lexmark shareholders, approval from China and a number of other foreign jurisdictions, regulatory approvals in the U.S., including the Committee on Foreign Investment, and other customary closing conditions.
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