The operation strengthens Xerox’s strategic transformation and consolidates its leadership in managed print services with a presence in over 170 countries.
Xerox Holdings Corporation (NASDAQ: XRX) has officially announced the completion of its acquisition of Lexmark International, Inc., previously owned by Ninestar Corporation, PAG Asia Capital, and Shanghai Shouda Investment Centre. The transaction, valued at $1.5 billion (approximately €1.39 billion), including net debt and assumed liabilities, marks a key milestone in Xerox’s strategic shift towards becoming a company focused on technology solutions for the hybrid work environment.
“We have always admired Lexmark’s strong reputation in printing and managed services, its global customer and partner base, and its international presence. Today, we take that collaboration to the next level,” said Steve Bandrowczak, CEO of Xerox, who will continue to lead the company after the integration.
An Integration that Redefines the Industry
The merger of Xerox and Lexmark creates an entity with over 200,000 customers in more than 170 countries and a network of 125 manufacturing and distribution centers spread across 16 countries. With this acquisition, Xerox positions itself among the top five players in all key segments of the printing market and becomes a global leader in managed print services (MPS).
“This strategic combination strengthens our core business, gives us access to growing market segments, increases our manufacturing capacity, and expands our commercial reach,” Bandrowczak added. “Additionally, it accelerates our reinvention strategy by improving the proportion of revenues from expanding markets and enabling sustained growth in adjusted operating profit.”
With Allen Waugerman stepping down as president and CEO of Lexmark, the executive team of the new Xerox will consist of leaders from both companies, allowing for scaled innovation and leveraging of combined talent.
Expected Synergies and Profitability
The transaction has been financed through a combination of available cash and debt financing. Xerox expects the deal to be accretive to adjusted earnings per share (EPS) and free cash flow in 2025, as well as to reduce the pro forma gross leverage ratio.
The company estimates generating approximately $240 million in integration-related synergies, which will translate to over $1 per share additional in adjusted EPS by the end of the second year following the closing of the transaction.
Driving Innovation in a Hybrid Environment
The integration reinforces Xerox’s positioning as a global provider of advanced office technologies and AI-driven digital solutions. According to the company, the aim is to continue developing a broader portfolio of products and services that meet the needs of an increasingly distributed business world, where on-site, remote, and mobile work coexist.
Xerox, synonymous with innovation for over a century, sees this acquisition as an opportunity to expand its reach in sectors such as education, healthcare, industry, and public administration by offering solutions that combine printing hardware, document management software, and cloud services.
Financial and Legal Advisory
In this transaction, Jefferies LLC served as Xerox’s lead financial advisor, along with Citi. Legal advisors were Ropes & Gray LLP and Willkie Farr & Gallagher LLP. For Lexmark, Morgan Stanley & Co. LLC acted as financial advisor, while Dechert LLP and King & Wood Mallesons provided legal advice to Lexmark and the selling shareholders.
Challenges and Future Vision
Xerox has acknowledged the inherent risks of integrating two large organizations, as well as uncertainties in the global macroeconomic environment, geopolitical tensions, inflation, and regulatory challenges. Nevertheless, the company is confident that the combination of capabilities and structural simplification will enable it to achieve its long-term profitability goals.
“We are better prepared than ever to deliver end-to-end innovative solutions that drive our clients’ success across all geographies and sectors,” Bandrowczak concluded.
With this acquisition, Xerox takes a decisive step in its commitment to lead the new era of intelligent printing and document management solutions in an ever-evolving business world.