Xerox completes $1.5 billion acquisition of Lexmark

NORWALK, Conn. - Xerox Holdings Corporation (NASDAQ:XRX), currently valued at $709 million in market capitalization, has completed its acquisition of Lexmark International, Inc. from Ninestar Corporation, PAG Asia Capital, and Shanghai Shouda Investment Centre for $1.5 billion, inclusive of net debt and assumed liabilities. According to InvestingPro data, this acquisition comes as Xerox’s stock trades near its Fair Value, with analysts projecting a return to profitability this year.

The transaction combines two major printing industry players, with the unified organization now serving over 200,000 clients across more than 170 countries and operating 125 manufacturing and distribution facilities in 16 countries. Despite recent market challenges that led to a 50% decline in stock price over the past year, Xerox has maintained its dividend payments for 19 consecutive years, demonstrating financial resilience. For deeper insights into Xerox’s financial health and future prospects, investors can access the comprehensive Pro Research Report available on InvestingPro.

Steve Bandrowczak will continue as CEO of Xerox, leading an executive team comprised of leaders from both companies. Allen Waugerman is stepping down as Lexmark’s president and CEO following the close of the deal.

"With the acquisition of Lexmark, Xerox now stands among the top five in every major print segment and is the market leader in managed print services," said Bandrowczak in a statement.

The acquisition was financed through a combination of cash on hand and debt financing. With current annual revenue of $6.17 billion and a healthy current ratio of 1.09, Xerox expects the transaction to be accretive to its 2025 adjusted earnings per share and free cash flow, with approximately $240 million in transaction-related cost synergies anticipated by the end of the second year following the close. InvestingPro analysis reveals several additional key metrics and insights about Xerox’s financial position, with over 30 exclusive ProTips available to subscribers.

Jefferies LLC served as the financial advisor to Xerox, with Citi also providing financial advice. Morgan Stanley & Co. LLC acted as financial advisor to Lexmark, while Strait Capital Management advised Ninestar Corporation.

The acquisition represents a significant step in Xerox’s strategic transformation as it aims to strengthen its core business by expanding into growing segments of the print market while increasing manufacturing capacity and distribution reach.

According to the press release statement, the combined entity will offer a broader portfolio of print and managed print solutions to clients and partners globally.

In other recent news, Xerox Holdings Corporation has announced a reduction in its quarterly dividend to $0.025 per share, a decision made in anticipation of its upcoming acquisition of Lexmark. The company has also issued $100 million in senior secured notes, which will help fund the Lexmark acquisition and repay Lexmark’s outstanding debt. This acquisition, valued at $1.5 billion, is expected to close in the third quarter of 2025, pending regulatory approvals. In a strategic move, Xerox has appointed two key Lexmark executives to its leadership team, enhancing its capacity to integrate Lexmark’s technologies.

Xerox shareholders recently approved an amendment to the company’s equity and performance incentive plan, increasing the number of shares available for issuance. Furthermore, Loop Capital has adjusted its price target for Xerox shares to $4.50, maintaining a Hold rating. This follows Xerox’s first-quarter earnings report, which showed weaker revenue and margins but also highlighted solid execution and growth in entry-level installations. Xerox has reaffirmed its 2025 financial guidance, projecting low single-digit revenue growth and an adjusted operating margin of at least 5%.

The company is also seeing early benefits from the integration of ITsavvy, with operational expenses decreasing year-over-year. Despite challenges in post-sale trends, Xerox expects improvements in the next two to three quarters. Additionally, the company is preparing for the Lexmark integration, which is in its final stages, with the acquisition anticipated to complete following regulatory approval from China.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.