Lexmark International to buy enterprise software maker Kofax for $1 bn

US laser printer manufacturer and enterprise software provider Lexmark International Inc today agreed to buy enterprise software maker Kofax Ltd in a deal vaued at about $1 billion.

Under the terms of the deal, Lexmark will acquire all of the outstanding shares of Kofax for $11 a share, a 47-per cent premium over Kofax's closing price yesterday.

Lexmark will fund the acquisition with its non-US cash on hand and its existing credit facilities.

Kofax's board of directors has unanimously recommended in favour of the merger and shareholders holding approximately 25 per cent shares have agreed to vote in favour of the deal.

Founded in 1985, Kofax provides software that can capture images, process management and analytics capabilities that allows companies to accept customer communications through multiple input paths such as by paper, fax or email.

It has more than 20,000 customers in financial services, insurance, government, healthcare, supply chain, business process outsourcing and others, and sells its software through more than 850 dealers in more than 75 countries throughout the Americas, EMEA and Asia Pacific.

The California-based company reported $297 million in revenue in 2014.

The deal will allow Lexmark to nearly double the size of its enterprise software business to $700 million and compete in the expanding $10 billion content and process management software market.

Lexmark said that this market is expected to have a compounded annual growth rate of approximately 10 per cent. In addition to the significant increase in scale, Kofax will help accelerate the growth and significantly increase the operating margins of its own software business.

"The acquisition of Kofax enhances our best-in-class offerings so our customers can capture, manage, access, and act upon their information more efficiently, and extends Lexmark into the high-growth smart process applications market," said Paul Rooke, Lexmark chairman and chief executive officer.

Reynolds Bish, CEO of Kofax said, "Our market-leading ability to simplify and transform the First Mile of customer engagement is a strong complement to Perceptive Software's strength in managing information across silos."

Kentucky-based Lexmark was founded in 1991 as a global provider of printing solutions and later expanded into printing solutions and services developed to run on a touch screen that is located on the printer that provides access to many software applications which reduces the complexities of manual paper processes.