As remote workers return to the office, Xerox Holdings Corporation announced its $1.5 billion acquisition of Lexmark International, Inc., from Ninestar Corporation, PAG Asia Capital, and Shanghai Shouda Investment Centre. The cash deal is expected to close during the second half of 2025 and will result in Xerox reducing its dividend by 50% to reduce debt.
“Lexington, Ky.-based Lexmark, a valuable partner and supplier to Xerox, is a leading provider of innovative imaging solutions and technologies including a best-in-class line of printers and multifunction printers,” according to the deal’s press release. “By combining Lexmark’s solutions with Xerox ConnectKey technology and advanced Print and Digital Services, the acquisition will create a superior offering portfolio….”
The demand for printers and office equipment surged in 2020 as pandemic lockdowns forced workers to transform their homes into workspaces. While the consumer printer market had been in decline for years, that abruptly reversed – causing severe inventory shortages. In fact, by March 2022, just 22% of online printer listings were in stock. Supplies have since evened out, and industry analysts anticipate the printer market will grow at a compound annual growth rate of 4.7% from 2024-2030.
Source: Grand View Research
As many companies switched to remote working, they largely enjoyed productivity gains. The Bureau of Labor Statistics determined in one study that remote work directly lead to increased productivity during the 2019-2022: “When workers shift their work location from office buildings to their homes, nonlabor inputs also can be expected to change. For example, employers may downsize their office footprints when remote workers are not using commercial office space. Businesses may also have lower utility expenses even if they keep their unoccupied office buildings, either because their leases have not yet expired or they intend to use the buildings in the future.”
Percent of Remote Workers, by Industry
Source: Bureau of Labor Statistics
The days of remote working may be ending, however. The Trump Administration has ordered all federal workers to return to the office and many private companies have increased in office attendance requirements. Of 1,551 U.S. business leaders surveyed, 1 in 3 will require employees to be in the office 5 days per week, with 60% increasing in-office requirements despite known opposition from employees. In fact, 10% of those surveyed indicated return to office mandates as a method of getting employees to quit – and thereby reducing headcount without layoffs. This strategy is in line with Elon Musk’s Department of Government Efficiency calls to reduce federal government headcount.
Source: AZBig Media
According to DealPulse’s M&A database, which harnesses both AI and attorneys to digest the granular deal points of publicly-announced transactions, Xerox is advised by law firms Ropes & Gray LLP and Willkie Farr & Gallagher LLP. Lexmark is advised by Dechert LLP and King & Wood Mallesons.
