Xerox Expands Reach in Hybrid Workplace with $1.5 Billion Acquisition
In a bold move to cater to the growing demand for flexible work arrangements, Xerox has agreed to purchase privately held Lexmark International from its Chinese owners for a staggering $1.5 billion. This strategic acquisition is poised to strengthen Xerox’s core print portfolio and create a more comprehensive global print and managed print services business.
Addressing the Evolving Needs of Clients
The deal is designed to meet the increasing demands of clients in the hybrid workplace, where workers are no longer confined to traditional office spaces. By acquiring Lexmark International, Xerox aims to provide a more extensive range of services and products tailored to the needs of this rapidly growing market.
Boosting Presence in Asia-Pacific Region
The acquisition will also significantly expand Xerox’s reach in the Asia-Pacific (APAC) region, a key market for the company. This move is expected to drive growth and increase Xerox’s competitiveness in the region.
Financing the Deal
To fund the acquisition, Xerox will utilize a combination of cash on hand and committed debt financing. As part of the deal, the company will cut its annual dividend in half to $0.50 per year, starting with the expected dividend in the first quarter of 2025. This move is expected to provide incremental capacity to reduce debt while continuing to reward shareholders with an above-market yield.
Transaction Timeline
The acquisition is expected to close in the second half of 2025, pending regulatory approvals and customary closing conditions. Despite the company’s shares being down 50% this year, Xerox is confident that this strategic move will drive long-term growth and success.
A New Era for Xerox
With this acquisition, Xerox is poised to become a leading player in the hybrid workplace market. By expanding its reach and capabilities, the company is well-positioned to capitalize on the growing demand for flexible work arrangements and drive innovation in the industry.
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