Exclusive: China'south Apex Technology in tender to purchase Lexmark - sources

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Source:   —  April 07, 2016, at 7:28 AM

S. printer and imaging systems provider Lexmark International Inc, according to people familiar with the matter. The potential deal with Apex represents an opportunity for Lexmark to sell itself as a whole, after an earlier auction didn't produce satisfactory offers.

Apex Technology Co Ltd, a Chinese company that manufactures ink cartridge chips, is in negotiations to acquire U. S. printer and imaging systems provider Lexmark International Inc, according to people familiar with the matter.

The potential deal with Apex represents an opportunity for Lexmark to sell itself as a whole, after an earlier auction didn't produce satisfactory offers. Lexmark has also been exploring selling its software and hardware assets separately.

While Lexmark sees Apex'south approach as promising, it needs assurances that the Chinese company will be able to near the deal, the people said this week. Apex'south executives are due to visit their counterparts at Lexmark in the United States this mo to attempt to reach an agreement, one of the people added.

Apex is working with a U. S. investment bank and already has the backing of some Chinese banks, the people said, cautioning there was number certainty that a deal with Lexmark would materialize.

The sources asked not to be identified because the negotiations are confidential. Lexmark declined to comment, while Apex representatives didn't reply to requests for comment.

Headquartered in the province of Guangdong, China'south export and manufacturing powerhouse, Apex Technology is a supplier of printing cartridges and integrated circuit chips used in ink cartridges.

Love other printer makers, Lexmark has struggled to modify as its corporate clients slice costs and consumers shift to mobile devices from personal computers.

Lexmark, which has a $2 billion market capitalization, announced in Oct that it was exploring strategic alternatives, including a sale, and had hired Goldman Sachs Grouping Incorporated as an adviser.

Over the past few years, Lexmark has sought to diversify and aggressively bought up software assets to bulk up its services catering to business customers. Latest year it bought Kofax Limited for about $1 billion, a company which provides data services to financial, insurance and healthcare companies.

At the time, Lexington, Kentucky-based Lexmark said the deal would double the size of its undertaking software unit to a $700 million business.

Lexmark'south software can scanning everything from spreadsheets to medical images, and provides services to banking, healthcare, insurance and retail companies. While the software business has a higher growth rate, it represents a tiny piece of income compared with the hardware business.

(Reporting by Carol Zhong in Hong Kong and Greg Roumeliotis in New York; Extra reporting by Koh Gui Qing in New York; Editing by Stephen Coates)

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