Lexmark Takeover Seen With Cheapest Shares
Lexmark International Inc. is poised to lure potential buyers with the least expensive technology valuation in America as the printer company’s closure of its inkjet operations spurs takeover speculation.
While Lexmark’s decision to close the inkjet business and cut 13 percent of its workforce prompted a 14 percent rally on Aug. 28, the company’s enterprise value is still 2.1 times Ebitda. That’s less than every computer-related corporation in the Standard & Poor’s 500 Index and second-lowest overall in the benchmark gauge for U.S. equities, according to data compiled by Bloomberg. Before this week’s rally, Lexmark had fallen 43 percent in 2012, worse than 99 percent of S&P 500 companies.
Lexmark’s actions, which leave the Kentucky-based company with laser printers and a services division, show the $1.5 billion corporation may be preparing itself for a sale, Raymond James Financial Inc. said. Xerox Corp. is the most logical buyer and could snap up a business once valued at more than $12 billion with only a year’s worth of free cash flow, according to Loomis Sayles & Co.
“They’re starting to be an acquisition target,” Federico De Silva, an analyst at Gartner Inc. “The problem is they’re in an industry that is maturing very rapidly, shrinking in many segments, and they’re becoming too small of a player when everybody else is diversifying.”