Private-Equity Firm, Hyland Software to Acquire Lexmark’s Software Business

Thoma Bravo, a private-equity firm, today announced that it’s entered into a definitive agreement with Lexmark International to acquire Lexmark’s Enterprise Software business, which is made up of three primary businesses: Kofax, ReadSoft, and Perceptive Software. The firm did not disclose a purchase price, although last week, Reuters reported that the purchase price was $1.5 billion.

The closing of the transaction is subject to usual and customary closing conditions and regulatory approvals, and is expected to occur in the third quarter of 2017. Apex Technology,  PAG Asia Capital, and Legend Capital Management, which acquired Lexmark in November of 2016, are said to support the sale of the Enterprise Software business.

Once the transaction is completed, the Perceptive Software business, including Perceptive Intelligent Capture, Acuo VNA, PACSGEAR, and Enterprise Medical Image Viewing will be sold to Hyland Software, which is a Thoma Bravo company and provider of enterprise content management software led by president and CEO Bill Priemer. The Kofax and ReadSoft businesses will create a single, newly independent Thoma Bravo portfolio company under the Kofax brand, and will be led by Reynolds C. Bish, current president of Lexmark Enterprise Software.

Seth Boro, a managing partner at Thoma Bravo, commented: “We’re incredibly excited to be acquiring the Lexmark Enterprise Software business as it contains some of the most advanced digital transformation technologies in the industry. The Perceptive Software business is highly complementary to Hyland, providing innovative technologies and vertical expertise. We’re equally thrilled to partner with Reynolds and his management team under the Kofax brand as a new Thoma Bravo portfolio company. Their vision to digitally transform and simplify initial customer interactions with businesses, or what they term the ‘First Mile,’ represents an exciting opportunity across all industries.”

“We have long admired the people and technology of Perceptive Software and are thrilled to welcome them into the Hyland family,” said Priemer. “The combination of our content services portfolios will provide tremendous benefit to our current and future customers and partners.”

“Thoma Bravo has an incredible track record of success building and growing software companies,” said Bish. “Their unparalleled industry expertise and operational excellence make them the ideal partner for this new venture.”

Lazard is serving as financial advisor, and Dechert LLP is serving as legal counsel to Lexmark International. Credit Suisse and Goldman, Sachs & Co. are serving as financial advisors, and Kirkland & Ellis LLP is serving as legal counsel to Thoma Bravo and Hyland. Financing for the transaction is being provided by Credit Suisse, Goldman, Sachs & Co. and UBS Investment Bank.

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