Xerox Boosts Printing Business with $1.5 Billion Lexmark Acquisition
In a move to revitalize its core business, office equipment giant Xerox has agreed to acquire Chinese-owned printer and printing software maker Lexmark International for $1.5 billion. This strategic deal will bring Lexmark back under U.S. ownership, after being sold to a group of Chinese investors in 2016 for $3.6 billion.
A Much-Needed Boost for Xerox
Xerox, a household name globally, has been struggling to stay afloat in the digital age. The company has seen its revenue decline for five consecutive quarters, and its shares have plummeted by over 50% this year. The acquisition of Lexmark is expected to provide Xerox with the scale it needs to compete more effectively in the market, particularly against rivals HP and Canon.
Expanding Global Reach
The combined company will serve over 200,000 clients in 170 countries, solidifying its position among the top five firms globally in various print segments. The deal will also enable Xerox to expand its presence in the Asia-Pacific region and strengthen its ability to tap into the growing A4 segment, which includes smaller-format printers and copiers commonly used in homes and offices.
Financing the Deal
Xerox plans to finance the acquisition through a combination of cash on hand and debt financing. As part of its efforts to reduce debt, the company will lower its annual dividend to 50 cents per share from $1, starting with the dividend expected to be declared in the first quarter of 2025.
Diversifying into IT Services
This acquisition is not the only move Xerox has made to diversify its business. In October, the company announced its plans to acquire ITsavvy, an Illinois-based IT products firm, for $400 million. This deal is expected to expand Xerox’s IT services business and provide a new revenue stream.
A Brighter Future Ahead
The acquisition of Lexmark is expected to close in the second half of 2025. With this deal, Xerox is poised to regain its footing in the printing industry and set itself up for long-term success.
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