Reuters reported Tuesday afternoon that Lexmark is considering splitting up its hardware and software businesses for separate sales, but Lexmark spokesman Jerry Grasso said that the company does not respond to speculation.
The company acknowledged in October that various alternatives were being considered “to enhance shareholder value.” A Wall Street Journal article said that the alternatives included a possible sale of the company.
Lexmark hired Goldman, Sachs & Co. as an adviser to assist its board while it made a decision.
According to the Reuters’ report, Lexmark’s hardware business had been hurt by a decline in printing hardware and supplies, while its software business is growing. Potential buyers had not yet made offers in line with Lexmark’s expectations, Reuters reported.
Reuters did not cite specific sources in its article, referring only to “people familiar with the matter.”
Lexmark’s Grasso said the company would not speak publicly about the strategic alternatives it is pursuing until “an appropriate time.”
Lexmark’s stock has been on a bumpy ride of late, but had appeared in the last week to be entering smoother waters. A Dividend Channel report on Friday suggested that recent heavy selling of the stock might be in the process of exhausting itself, leading to buying opportunities.
Until late 2015, Lexmark had been on a buying binge to broaden the reach of its business information services. In March, 2015, the company made its biggest acquisition ever when it paid $1 billion for California-based Kofax Ltd., which provides services to financial, insurance and healthcare companies.
Lexmark’s strategy had been to handle a company’s structured and unstructured information needs in a seamless line from software to hardware and managed printing.
Headquartered in Lexington, Lexmark employs about 2,300 people here and is one of the area’s largest employers.
How Lexmark will ultimate enhance shareholder value is a subject of much speculation. Traditionally, companies charged with “releasing value” have options that include splitting the company into smaller companies, moving employees around, taking the company private or changing geographic location.