Xerox Holdings To Acquire Lexmark International In $1.5 Bln Deal

(RTTNews) - Xerox Holdings Corp. (XRX) announced Monday it has agreed to acquire privately-held Lexmark International, Inc., from Ninestar Corp., PAG Asia Capital, and Shanghai Shouda Investment Centre in a deal valued at $1.5 billion, inclusive of assumed liabilities.

This acquisition will strengthen the Xerox core print portfolio and build a broader global print and managed print services business to meet the evolving needs of clients in the hybrid workplace.

By combining Lexmark's solutions with Xerox ConnectKey technology and advanced Print and Digital Services, the acquisition will create a superior offering portfolio and underscores Xerox commitment to increasing value for clients and partners.

The transaction will also strengthen the ability of Xerox to serve clients in the large, growing A4 color market and diversify its distribution and geographic presence, including the APAC region.

The new organization will serve more than 200,000 clients in 170 countries with 125 manufacturing and distribution facilities in 16 countries.

Xerox expects to finance the acquisition with a combination of cash on hand and committed debt financing.

In conjunction with this financing, the Xerox Board of Directors approved a change in the dividend policy to reduce the Xerox annual dividend from $1 per share to 50 cents per share starting with the dividend expected to be declared in the first quarter of 2025.

This lowered dividend payment provides incremental capacity to reduce debt while continuing to reward shareholders with an above-market yield.

The Xerox Board of Directors has unanimously approved the transaction. The transaction is subject to regulatory approvals, approval of Ninestar's shareholders, and other customary closing conditions.

The transaction between printing industry icons is expected to close in second half of 2025. Until then, both Xerox and Lexmark will maintain their current operations and operate independently.

The transaction is expected to be immediately accretive to earnings per share and free cash flow. There are also more than $200 million of identified cost synergies to be realized within two years of transaction close.