As rumored earlier this month, printing firm and software developer Lexmark International has agreed to a $3.6 billion acquisition offer by an investor consortium led by Chinese ink cartridge manufacturer Apex Technology and private equity firm PAG Asia Capital.
The consortium, which also includes Chinese venture capital company Legend Capital Management, will pay $40.50 in cash for Lexmark, representing a 30% premium to Lexmark's closing share price on October 21, 2015.
Lexmark announced on October 22 that it was pursuing strategic alternatives, likely to involve a sale of its hardware unit, software unit, or both. Although Lexmark was reported to have received bids for its software business earlier this year, no agreement was ever finalized.
For Lexmark, the proposed deal was the culmination of a review of strategic alternatives aimed at maximizing shareholder value and unlocking the company's intrinsic value, according to the vendor. Lexmark's two business groups -- Imaging Solutions and Services and Enterprise Software -- will benefit from the acquisition, as will the firm's regional and country operations. The company said it expects all operations to benefit strategically and financially from the transaction.
The consortium plans to maintain Lexmark's corporate headquarters in Lexington, KY; current chairman and CEO Paul Rooke is expected to continue to head up Lexmark after the acquisition is completed.
The deal is expected to close in the second half of 2016 and is subject to Lexmark shareholder approval; regulatory approvals in the U.S., China, and certain other foreign jurisdictions; and other customary closing conditions. The consortium will finance the merger through equity contributions and debt financing. After the deal is finalized, Lexmark's stock will no longer be publicly traded on the New York Stock Exchange.
