Xerox is buying another major player in the printing world. The company announced on Monday it will purchase Lexmark in a deal valued at $1.5 billion.
Xerox CEO Steve Bandrowczak said the acquisition “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.
Lexington, Kentucky based Lexmark, which already is partner and supplier to Xerox, has products that include printers and multifunction printers.
Lexmark President and CEO Allen Waugerman said in a statement that “Lexmark and Xerox are two great companies that together will be even greater.”
The Wall Street Journal noted the acquisition will bring Lexmark back under U.S. ownership. The company’s current owners are Ninestar Corp., PAG Asia Capital and Shanghai Shouda Investment Center.
Xerox is expected to finance the deal with a combination of cash on hand and committed debt financing.
At Brighton Securities, Chairman George Conboy said with the big changes going on in the printing industry, Xerox really needed to come up with a deal like this. And he said it could also be good for Xerox’s employee base in the Rochester area in the long run.
“Without acquisitions like this, the expectation would be layoffs would continue over time, and Xerox would keep fading," Conboy said. "So this sort of flips the script a little bit. Let's hope it grows the workforce.”
Xerox also announced on Monday that in conjunction with the financing, its Board of Directors approved a change in the annual dividend, reducing it from $1 per share to 50 cents per share. The company’s statement said that the lowered dividend payment “provides incremental capacity to reduce debt while continuing to reward shareholders with an above-market yield.”
The deal is subject to various regulatory and other approvals and is expected to close in the second half of 2025.
