Where is Phil Collins when you need him? Apparently, not in the global financial sector. So when the longtime Genesis front man and drummer crooned about “there must be some misunderstanding,” he didn’t have the Xerox acquisition of Lexmark, especially the price, in mind.
A bit of confusion has reverberated through the financial and trade publications, stemming from Reuters on Wednesday citing a Ninestar exchange filing that “estimated the transaction price to be between $75 million to $150 million, based on Lexmark’s latest operational status” instead of the $1.5 billion reported in last December’s landmark announcement. Sadly for Xerox, there wasn’t a blue dot label on the price tag that indicated a 90% off sale. That figure likely represents Lexmark’s equity value, not the enterprise value.
The debts and liabilities, while somewhat ponderous, represent money coming out of Xerox’s figurative wallet (or their added debt). The cash component may be $150 million-ish, but the enterprise value is what it is costing the Norwalk, Connecticut-based manufacturer.
Justin Capella of Xerox’s corporate communications department shared the following statement to clarify the matter. “In December 2024, Xerox announced it had agreed to acquire Lexmark International, Inc., from Ninestar Corporation, PAG Asia Capital, and Shanghai Shouda Investment Centre in a deal valued at $1.5 billion. As stated in the announcement, the figure is inclusive of debt and other liabilities. While Xerox cannot comment on Ninestar’s internal valuation, it appears they are referring to an equity value that excludes this debt and other liabilities, which were publicly disclosed within the U.S. regulatory filing Xerox made when the deal was announced.”
The deal is expected to close in June or July. Nine years ago, the Chinese investors paid a staggering $3.6 billion for Lexmark.
And yes, it was a slow news week.
