--This article was written by Laura Board of The Deal
Printer and printing software maker Lexmark International (LXK) has agreed to a $3.6 billion takeover by a Chinese consortium led by Apex Technology and PAG Asia Capital.
The deal follows a review that the Lexington, Ky.-based maker's board began in October and is the culmination of years of turnaround efforts as the company sought to transform itself from a pure maker of printers into a provider of higher-margin technology.
In a statement early on Wednesday, the parties said the bid partners would offer $40.50 per share in cash, a 30% premium to Lexmark's share price before the review was made public and almost 17% more than Lexmark's Tuesday closing price of $34.66.
Chairman and CEO Paul Rooke said in a statement that the agreement followed an "exhaustive strategic alternatives review process focused on maximizing shareholder value."
The deal highlights Chinese groups' increasing ability to compete successfully against Western bidders in organized sale processes and defies initial expectations that Lexmark would fall to a U.S. company such as Xerox (XRX) or Hewlett-Packard (HPQ).
It is the latest in a string of big-ticket outbound deals by Chinese buyers in the U.S. and Europe that put the total value of overseas Chinese acquisitions in the first quarter at more than $90 billion, more than three quarters of the way already to 2015's record level, according to Dealogic Ltd.
In keeping with Chinese acquirers' typical playbook, Apex will keep Lexmark chairman and CEO Paul Rooke at the helm and maintain the group's corporate headquarters. Rooke said the new owners will take Lexmark to the "next level of growth and innovation."
Apex is a maker of inkjet and laser cartridge components listed on the Shenzhen exchange. Its chairman is Jackson Wang.
Along with Apex and Hong Kong-based PAG, the bid consortium also includes Legend Capital Management -- the venture capital unit of Hong Kong-listed conglomerate Legend Holdings Corp.
The deal is conditional, among other hurdles, on the approval of the Committee on Foreign Investment in the U.S. (CFIUS), which will look closely at whether the target has proprietary technology that officials feel should stay in U.S. hands.
CFIUS intervention in February nixed Chinese investment group Unisplendour Corp. Ltd.'s deal to pay $3.8 billion purchase for a stake in storage provider Western Digital, and that same month the spectre of a regulatory veto derailed a fledgling $2.5 billion offer from China Resources (Holdings) for Fairchild Semiconductor International (FCS) which the target had previously said was superior to a bid from ON Semiconductor (ON).
Assuming all goes to plan the companies see the deal closing in the second half.
-- This article was originally published by The Deal, a sister publication of TheStreet that offers sophisticated insight and analysis on all types of deals, from inception to integration.Click here for a free trial.