Lexmark splashes $1BEEEELION on Kofax

How many printer cartridges does that equate to? A lot

Lexmark International is trying to counter flatlining revenues and falling demand for print hardware by splashing $1bn to consume enterprise software seller Kofax.

Under the terms of the deal, Lexmark will cough $11 per share and fund the buy with non-US cash on hand and existing credit facilities, it said.

Kofax’s portfolio includes intelligent information capture, BPO and analytics. It turned over $289m in sales for fiscal ’14 ended June, up from $266m, but operating profit dropped 59 per cent to $10.2m, struck by rising overheads and one-off costs.

The content and process management software market, worth $10bn, is forecast to grow by around ten per cent this year.

The buy will be bolted onto Lexmark’s Perceptive Software division, and doubles the size of the operation. The unit grew 31 per cent in calendar ’14 to $296m.

This expansion compares favourably to the Imaging Solutions and Services unit, which declined less than one per cent to $3.41bn, following Lexmark’s 2012 exit from the inkjet sector.

Lexmark, the former print business owned by IBM, also warned back in January that total revenue for this year would decline by three to five per cent year-on-year in 2015, caused in part by the biting currency headwinds in Europe.

The acquisition is expected to close in the second quarter, should shareholders and regulatory bodies give the thumbs up.

Execs from both companies talked up the impact of the deal but said very little that is worth quoting in this publication. ®

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