MRO Magazine

Lexmark Acquired by Apex Technology – Research and Markets


June 2, 2016
By Business Wire News

DUBLIN

Research and Markets has announced the addition of Photizo’s Group’s new report “Lexmark Acquired by Apex Technology” to their offering.

The imaging industry has suffered a reduction in revenue and operating income over the past 10 years. In October 2015, Lexmark announced that its Board of Directors had authorized the exploration of strategic alternatives to enhance shareholder value. Lexmark completed 2015 with $3.6B in revenue posting losses in four of the past five quarters. It said in February 2016 it was cutting 550 jobs (- 4 percent of its workforce) and recently said it would cut another 500 jobs (presumably to prepare for a sale).

What Happened:

– Apex Technology, an aftermarket manufacturer, has acquired (subject to regulatory approval) Lexmark, an OEM manufacturer which is 10X its size.

– Lexmark is leading in the strategy of a manufacturer acquiring software firms in order to develop complete workflow solutions in order to differentiate it from firms just providing hardware and supplies. In essence, the goal is to build an Advanced Document Solutions (ADS) capability which complements the firm’s Managed Print Services (MPS) fleet management capabilities.

Why Is It Important and Implications:

1. This is the first time an aftermarket manufacturer has acquired an OEM.

2. This raises the key question – does the strategy of moving up to ADS actually add value and make a firm’s solutions (including hardware and supplies) more valuable to a company?

3. Could a remanufacturer disrupt the industry by having the resources (and cash flow) associated with an OEM manufacturer including the sales and distribution capabilities?

Assessment

– The analysts take the position that Lexmark’s strategy was good, but the execution was flawed. They did not truly combine’ the two companies and failed to achieve synergy. In addition, the lack of a professional consulting capability to drive the organization change and transformation associated with workflow solutions was also a fatal flaw’ in execution that was never addressed.

– While this will give Apex/Lexmark a cost advantage in multi-vendor fleet management engagements (through Apex’s compatible supplies), it would not necessarily disrupt the market unless Apex uses Lexmark’s sales and distribution channels to start a supplies price war

Key Topics Covered:

  1. Time Line
  2. Executive Summary
  3. Introduction
  4. The Field of Potential Suitors, and Our Pick For Buying Lexmark
  5. The Game Heats Up?
  6. The End Game
  7. Who is this Consortium?
  8. Implications
  9. The Strategy Question
  10. Future
  11. Copyright Notice
  12. Licensing
  13. Intelligence is a Choice

Companies Mentioned

– Apex Technology

– Lexmark

For more information visit http://www.researchandmarkets.com/research/65nx2f/lexmark_acquired

Source – Photizo Group

Research and Markets
Laura Wood, Senior Manager
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