Lexmark, the printer manufacturer, has announced that it will buy a Business Process Management (BPM) software provider in a $1bn all-cash deal.
Kofax, a provider of capture and BPM software services assisting over 20,000 customers worldwide with their Operational Excellence and Customer Experience, and Lexmark announced that they had entered into a definitive merger agreement, which will help to accelerate Lexmark’s growth and significantly increase the operating margins of its software business.
Commenting on the deal, Paul Rooke, Lexmark Chairman and CEO, said it would extend Lexmark’s position into the high-growth smart process applications market: "Our customers will have a breadth of hardware and software solutions that connect their information silos and automate their business processes – enabling them to access the most relevant information at the moment they need it to drive business forward."
Kofax has over 20,000 customers worldwide in financial services, insurance, government, healthcare, supply chain, and business process outsourcing.
When the proposed deal closes, expected in Q2 2015, subject to regulatory and Kofax shareholder approval, Lexmark says it will nearly double the size of its enterprise software business into a $700mn business, "competing in the expanding $10bn content and process management software market"; a market the firm states is expanding at a growth rate of around 10% a year.
"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," added Reynolds C. Bish, CEO of Kofax. "As a result, we're excited about the future and working together to realize the full potential of this opportunity."
Craig Le Clair, Vice President, Principal Analyst at Forrester and BPM expert, has a modestly positive take on the acquisition, and states: "Kofax has been a strong driver of Smart Process Apps (SPA) of lucrative use cases like mortgage, invoice and other areas. Lexmark can help with deeper vertical market penetration and more developed business development and marketing teams that could accelerate what is a strong SPA strategy."
"Once the dust settles, "adds Le Clair, customers on both sides, "will have perhaps the largest arsenal of technologies to help digitize their business".
The news follows on from Lexmark’s acquisition last year of document management firm ReadSoft in its broader strategic move to further transform itself into a solutions-based software company.