Lexmark announced big news today regarding job cuts and the paper industry. We have some more breaking news on the topic. It appears that the company is putting itself up for sale, and using Goldman Sachs Group, Inc. (NYSE:GS) as an advisor.
Below is a quote from Goldman Sachs, which was released today (emphasis ours):
Carlson Capital's Black Diamond Arbitrage Partners fund added 1.3% net fees in the first quarter of 2021, according to a copy of the firm's March 2021 investor update, which ValueWalk has been able to review. Q1 2021 hedge fund letters, conferences and more At the end of the quarter, merger arbitrage investments represented 89% of Read More
Moving to Not Rated
The Americas Investment Review Committee has determined that the ratings and price target for Lexmark International Group (LXK) should be removed. Goldman Sachs is acting as a financial advisor in connection with a matter that is fundamental to the reasonable analysis of the rating and price target for this stock. This “Not Rated” status will continue until such time as sufficient information is available, and/or contingencies appear resolved, to allow such analysis. Earnings estimates during this period will be made without regard to the proposed transaction.
Furthermore, the note states later on in (very) small print:
Goldman Sachs is acting as financial advisor to Lexmark International, Inc. in an announced strategic matter.
It is hard to imagine what this means besides a sale or some type of merger & acquisition. Lexmark International Inc with a market capitalization of $1.5 billion and an enterprise value of $1.1 billion could easily be a target for a larger company or a Private Equity firm. We suspect that talks are under-way, although we have no idea if they will come to fruition. Lexmark is up 13% today, so any company looking to acquire the Lexington, KY based company, will have to shell out a hundred million or so extra dollars on the deal.
What makes a sale more likely is that there is no large shareholder who can block the deal. Vanguard Group is the largest holder of Lexmark International Group (LXK) with under 7% of outstanding shares held.
Spokespeople for both Lexmark International Group (LXK) and Goldman Sachs Group, Inc. (NYSE:GS) did not return requests for comments on the matter.
This news is breaking, we will update when we hear more information.
(Disclosure: No position in any companies mentioned)