Lexmark to be acquired by Chinese investors in $3.6 billion deal

Lexmark on Tuesday announced that it has agreed to be acquired by China’s Apex Technology Co., PAG Asia Capital and Legend Capital Management in a transaction valued at $3.6 billion.

The all-cash transaction, which will amount to $40.50 per share, has been unanimously approved by Lexmark’s board of directors. After the transaction is complete, most likely in the second half of 2016, Lexmark’s common stock will cease to be publicly traded on the New York Stock Exchange; Apex, one of the companies in the consortium buying Lexmark, is listed on the Shenzhen stock exchange in China.

“Lexmark’s corporate headquarters will stay in Lexington, and they do not expect significant changes in employment,” Mayor Jim Gray said in a statement Tuesday night. “Lexmark and IBM before them have been valued members of our corporate community for many years. I look forward to a productive positive relationship between Lexington and Apex Technology and PAG.”

As one of Lexington’s largest private employers, Lexmark’s every move is scrutinized for how it will affect the Central Kentucky economy.

In a brief interview Tuesday evening, Paul Rooke, chairman and chief executive officer of Lexmark, said that being bought by the consortium including Apex “provides a wonderful growth opportunity into Asia and China ... and we’ll strengthen their technology portfolio.”

Rooke is expected to continue to lead Lexmark after the transaction closes.

Lexmark stock moved sharply higher after the announcement, which came after the market close, surging more than 11 percent to $38.64 in after-hours trading.

Rooke said Apex wants “to be a global multinational company. ... Apex is smaller than Lexmark, very China-centric.”

Apex, founded in 2004 and headquartered in the province of Guangdong, makes ink cartridge chips and integrated circuit chips used in ink cartridges. Zhuhai Seine Technology Co. is the largest shareholder of Apex, holding about 70 percent of the voting shares of Apex.

Rooke said the move is good for Lexmark employees, as the headquarters will remain in Lexington; few if any Lexmark employees will be affected, he said.

All Lexmark business units, including imaging and enterprise software, will be unaffected, Rooke said. The company has 2,300 employees in Lexington and more than 12,000 worldwide.

Reuters reported this month that Lexmark was in talks with Apex. Lexmark said last October that it was exploring “strategic alternatives” to enhance shareholder value but would not confirm ensuing speculation about which corporate suitors were considering Lexmark, or whether the company could be split and sold as individual hardware and software units.

Although Lexmark had been on a buying binge to broaden the reach of its business information services, the company’s stock had languished. In the last year, Lexmark stock hit a low of $24.45 a share on Feb. 12, 2016, capping a gradual slide from $47.32 on July 20, 2015.

On March 23, Lexmark announced that it was laying off 143 workers in Lexington beginning May 25. The announcement came via a notice filed with the city. Lexmark would not discuss the layoffs, nor would it discuss what numbers of employees had been targeted for layoff when asked on Tuesday.

In February, Lexmark announced a restructuring that would eliminate 550 positions, or about 4 percent of its workforce, worldwide over the next year. Some of the jobs were to be shifted to lower-cost countries, the company said.

Cheryl Truman: 859-231-3202, @CherylTruman