Lexmark Buys Printer Software Co. Kofax At 47% Premium In $1B Deal

Lexmark Buys Printer Software Co. Kofax At 47% Premium In $1B Deal
By Tiernan Ray

Shares of printer maker Lexmark International (LXK) are up $1.86, or almost 5%, at $42.65, in late trading, after the company this afternoon announced it will purchase enterprise software maker Kofax (KFX) for $11 per share, or a total enterprise value of $1 billion, using Lexmark’s overseas cash.

The price is a 47% premium to Kofax’s close of $7.50 on Nasdaq today. Hence, Kofax’s U.S.-listed shares are up $2.68, or 36%, at $10.18 in late trading.

Lexmark said the deal “immediately enhances Lexmark’s industry-leading
enterprise content management and business process management offerings.”

Kofax, which is headquartered in Irvine, California, and which has 20,000 customers and reported $297 million in revenue in 2014, sells a variety of enterprise applications, including for document “capture,” as with a scanner; it also offers applications for mobile devices.

Lexmark defended the purchase as being in accord with its goals for capital allocation:

The acquisition of Kofax demonstrates the continued execution of Lexmark’s capital allocation framework, which is to pursue acquisitions that strengthen and support the growth of Lexmark’s solutions capabilities, while returning capital to shareholders. Since the first quarter of 2011, Lexmark has returned 78 percent of its free cash flow to shareholders in the form of dividends and share repurchases. The transaction will not impact Lexmark’s quarterly dividend.