China-based Ninestar Corp (002180.SZ) intends to sell Lexmark International II, a maker of printers and printing software, to Xerox (XRX.O) in a transaction valued at up to $150 million. Ninestar mentioned in a filing on Wednesday that, according to Lexmark's most recent operational condition, it has projected the transaction value, based on the equity value, to be between $75 million and $150 million.
In a statement emailed to Reuters late Thursday, the company specified that the price revealed on Wednesday was the net equity price for shareholders after accounting for net debt and all fees or debt-like expenses related to the transaction. Last December, Xerox announced it had agreed to purchase Lexmark for an enterprise value of $1.5 billion, incorporating assumed liabilities from Ninestar, PAG, a private equity firm, and Shanghai Shouda Investment Centre to enhance its foothold in Asian markets.
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On Thursday, a representative from Xerox stated that the deal's value remains the same as in their original announcement. In a December stock market report, Ninestar indicated that the deal's price was estimated using the $1.5 billion base value, the adjusted net operating capital of the company, and projected cash on the transaction date, while subtracting Lexmark’s debt and transaction expenses from the overall sum.
Established from IBM in 1991, Lexmark was acquired by a consortium of Chinese investors for $3.6 billion in 2016. The agreement would return Lexmark to American ownership. Xerox anticipated that the agreement would quickly boost profits and generate over $200 million in yearly cost reductions, particularly by lowering marketing and real estate spending, as revealed in the December announcement.
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