Lexmark's $1 billion purchase of California-based Kofax Ltd., announced Tuesday, will, Lexmark hopes, give an increased competitive edge to its Perceptive Software unit.
Along with other acquisitions made by Lexmark in recent years, Kofax Ltd. will boost its strategy of becoming more of a business solutions company across industries rather than simply a printer company.
Lexmark divested its inkjet printer business in 2013. The acquisition of Kofax Ltd. will nearly double the size of Lexmark's enterprise software business and allow Lexmark to position itself as a company that provides products and software to businesses across a broad spectrum of needs.
The Kofax deal will help the company's Perceptive Software business achieve its revenue target of $500 million in 2016, Lexmark said.
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"At the top level, it strategically makes sense and financially makes sense," said Paul Rooke, Lexmark's president and chief executive officer, in a telephone interview on Thursday.
Kofax provides customer engagement and information software for financial services, insurance, government and health care sectors. It makes software to scan everything from spreadsheets to medical images.
"There's a number of very exciting things it will bring to our strategy," Rooke said.
And, needless to say, it's Lexmark's biggest acquisition ever.
The deal is to be paid for in part by offshore capital. Although headquartered in Irvine, Calif., Kofax is chartered in Bermuda.
Lexmark will probably close on Kofax by late in the second quarter, Rooke added. Until then, Lexmark is in the process of integrating Readsoft, acquired in 2014. Based in Helsingborg, Sweden, Readsoft produces applications for business process automation and operates in 17 countries, among them Australia, Germany, South Africa and the United Kingdom.
Lexmark has been on a buying binge over the last few years. In addition to ReadSoft, it acquired AccessVia of Seattle; Twistage of San Francisco; Pacsgear of Pleasanton, Calif.; Acuo Technologies of Minneapolis; Pallas Athena of the Netherlands; Saperion of Germany; ISYS Software of Australia, now called Perceptive Search; Brainware of Luxembourg; and Nolij Corp. of Beverly, Mass.
All of the companies provided a piece of the expertise, processes and customers that Lexmark hopes to have in future.
Shares of Kofax on NASDAQ surged more than 40 percent right after the Lexmark acquisition news, then closed Thursday at $10.93. The stock's 52-week range is $5.65 to $11.02. Lexmark is acquiring all outstanding shares of Kofax at $11 a share.
Lexmark shares rose about 6 percent after news of the acquisition broke, then closed Thursday at $43.21, off a 52-week high of $51.77.