Form 8-K LEXMARK INTERNATIONAL For: Mar 24

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March 24, 2015 4:47 PM EDT

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

March 24, 2015

LEXMARK INTERNATIONAL, INC.

(Exact Name of Registrant as Specified in its Charter)

	Delaware		1-14050		06-1308215
	(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

One Lexmark Centre Drive

740 West New Circle Road

Lexington, Kentucky 40550

(Address of Principal Executive Offices) (Zip Code)

(859) 232-2000

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

Agreement and Plan of Merger

On March 24, 2015, Lexmark International, Inc., a Delaware corporation (“Lexmark”), Lexmark International Technology, S.A., a Switzerland joint stock company and wholly-owned subsidiary of Lexmark (“LITSA”), Ariel Investment Company, Ltd., a Bermuda exempted company and wholly-owned subsidiary of LITSA (“Merger Sub”), and Kofax Limited, a Bermuda exempted company (“Kofax”) entered into an Agreement and Plan of Merger (the “Merger Agreement”).

Pursuant to the Merger Agreement, Merger Sub will, subject to the terms and conditions of the Merger Agreement, merge with and into Kofax (the “Merger”) at the Effective Time (as defined in the Merger Agreement), the separate corporate existence of Merger Sub will cease and Kofax will continue as the surviving company of the Merger and become an indirect wholly-owned subsidiary of Lexmark. At the Effective Time of the Merger, LITSA will acquire all of the common shares, par value $0.001 per share, of Kofax (the “Common Shares”) that are issued and outstanding immediately prior to the consummation of the Merger for cash in the amount of $11 per share, for total cash consideration of approximately $1 billion. At the Effective Time, each option to purchase Common Shares (each a “Kofax Option”) outstanding immediately prior to the Effective Time, shall, in connection with the Merger, automatically be assumed by Lexmark and be converted into an option to purchase shares of Lexmark Class A Common Stock (“Lexmark Stock”) having a value intended to be equal to the value of the applicable Kofax Option immediately prior to the Effective Time. Each Kofax LTIP Award outstanding immediately prior to the Effective Time, shall, in connection with the Merger, automatically be assumed by Lexmark and be converted into that number of time-vesting restricted stock units of Lexmark having a value intended to be equal to the value of Common Shares underlying the applicable Kofax LTIP Award immediately prior to the Effective Time. In general, Kofax Options and Kofax LTIP Awards shall be subject to the same terms and conditions as applied to the award immediately prior to the Effective Time, provided that any performance vesting condition applicable to the Kofax LTIP Award shall be deemed achieved at target.

Each of LITSA, Merger Sub and Kofax has made customary representations and warranties and covenants in the Merger Agreement. The Merger is subject to various closing conditions, including but not limited to (i) approval of the Merger Agreement by at least 75% of the Kofax shareholders who vote at or are otherwise represented by proxy at the Kofax special meeting of shareholders, (ii) the expiration or earlier termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (iii) foreign antitrust clearance, (iv) the absence of any law, order or injunction prohibiting the Merger, (v) the accuracy of each party’s representations and warranties and (vi) each party’s compliance with its covenants and agreements contained in the Merger Agreement.

The Merger Agreement contains certain termination rights for both LITSA and Kofax, including that if the Merger is not consummated by September 30, 2015 (or December 31, 2015, if government consent is the only outstanding condition of closing). The Merger Agreement further provides that, upon termination of the Merger Agreement upon specified circumstances, Kofax will be obligated to pay LITSA a termination fee of $35,000,000.

The foregoing description of the Merger Agreement is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which will be filed as an exhibit to Lexmark’s Form 10-Q for the quarter ended March 31, 2015.

Voting Agreement

Concurrently with the execution of the Merger Agreement, members of the Company’s board of directors and certain shareholders, including entities affiliated with Mr. William T. Comfort III and Mr. James A. Urry (each members of the Company’s board of directors), representing approximately 25% of the Common Shares, entered into a voting agreement with LITSA, Merger Sub and Kofax (the "Voting Agreement"), pursuant to which each of the shareholders have agreed to vote all of the Common Shares beneficially owned by such shareholder for the approval of the Merger Agreement.

The Voting Agreement prohibits the shareholders from transferring their Common Shares, subject to certain exceptions, and contains a customary “no shop” covenant prohibiting the shareholders from soliciting, or furnishing information or engaging in discussions or negotiations concerning, proposals relating to an Acquisition Proposal (as defined in the Merger Agreement).

The Voting Agreement terminates upon a termination of the Merger Agreement, the Effective Time of the Merger, the date of any material modification to the Merger Agreement reducing the consideration payable to the shareholder, or upon the mutual consent of the parties to the Voting Agreement.

The foregoing description of the Voting Agreement is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the Voting Agreement, a copy of which will be filed as an exhibit to Lexmark’s Form 10-Q for the quarter ended March 31, 2015.

Item 8.01. Other Events.

On March 24, 2015, Lexmark and Kofax issued a joint press release announcing the execution of the Merger Agreement. The text of the press release announcing the Merger is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d)	Exhibits
	Exhibit No.	Description of Exhibit
	99.1	Joint Press Release issued by Lexmark International, Inc. and Kofax Limited, dated March 24, 2015.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Lexmark International, Inc.

(Registrant)

March 24, 2015

By: /s/ Robert J. Patton

Robert J. Patton

Vice President, General Counsel and Secretary

EXHIBIT INDEX

Exhibit No.		Description of Exhibit
99.1		Joint Press Release issued by Lexmark International, Inc. and Kofax Limited, dated March 24, 2015.

Exhibit 99.1

Lexmark to acquire Kofax

LEXINGTON, Ky. & IRVINE, Calif., March 24, 2015

●

Lexmark International, Inc. (NYSE: LXK) and Kofax Limited (NASDAQ and LSE: KFX) today announced that the two companies have entered into a merger agreement in which Lexmark will acquire Kofax. Under the terms of the merger agreement, Lexmark will acquire all of the outstanding shares of Kofax for $11.00 per share in cash for a total enterprise value of approximately $1 billion, net of cash acquired.

●	Lexmark will fund the acquisition with its non-U.S. cash on hand and its existing credit facility programs.

●	Kofax’s Board of Directors has unanimously recommended in favor of the merger agreement. Kofax shareholders, holding approximately 25 percent of the outstanding shares of Kofax, have signed a voting agreement committing to support the merger.

●

Upon successful completion of the acquisition, Lexmark will nearly double the size of its enterprise software business to an approximately $700 million business competing in the expanding $10 billion content and process management software market. This market is expected to have a compounded annual growth rate of approximately 10 percent. In addition to the significant increase in scale, Kofax will help accelerate the growth and significantly increase the operating margins of Lexmark’s software business.

●

The addition of Kofax immediately enhances Lexmark’s industry-leading enterprise content management and business process management offerings. In the capture technology field, the combination of Kofax’s smart process applications with Perceptive Intelligent Capture will create the broadest and deepest portfolio of capture solutions in the market, ranging from Web portals and mobile devices to smart MFPs.

●	The acquisition will result in an enhanced, more efficient balance sheet benefiting from the deployment of available overseas cash and existing balance sheet capacity.

●	Founded in 1985 and headquartered in Irvine, California, Kofax reported 2014 revenue of $297 million. Kofax has over 20,000 customers worldwide, including

80 on the Fortune Global 100 list. The company operates in all regions of the world and has more than 850 channel partners globally.

●

The acquisition of Kofax demonstrates the continued execution of Lexmark’s capital allocation framework, which is to pursue acquisitions that strengthen and support the growth of Lexmark’s solutions capabilities, while returning capital to shareholders. Since the first quarter of 2011, Lexmark has returned 78 percent of its free cash flow to shareholders in the form of dividends and share repurchases. The transaction will not impact Lexmark's quarterly dividend.

●	The acquisition is expected to close in the second quarter of 2015 and is contingent on Kofax shareholder approval, applicable regulatory clearances and other customary closing conditions.

●	Goldman, Sachs and Co. is serving as exclusive financial advisor to Lexmark. Lazard is serving as exclusive financial advisor to Kofax on this transaction.

Supporting Quotes

“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. “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 accelerates Lexmark’s development of industry-specific solutions while also immediately expanding our reach into the midmarket, where there is increasing demand for technology to better manage the growing amount of unstructured information and improve customer engagement,” added Rooke.

“The combination of Perceptive Software and Kofax solutions strengthens the breadth and depth of our offering, giving us an unmatched ability to help customers of all sizes, in all industries and across the globe to connect unstructured information to their systems of record,” said Scott Coons, Perceptive Software president and chief executive officer and Lexmark vice president.

“We believe joining forces with Lexmark benefits our customers, partners, employees and shareholders and the merger will build on Kofax’s rich history of continuous innovation,” said Reynolds C. Bish, chief executive officer, Kofax. “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. As a result, we're excited about the future and working together to realize the full potential of this opportunity to the benefit of all stakeholders.”

Conference Call Today

The company will host a conference call with securities analysts today at 5:00 p.m. (EDT). A live broadcast and a complete replay of this call can be accessed from Lexmark's investor relations website at http://investor.Lexmark.com. If you are unable to connect to the Internet, you can access the call via telephone at 888-693-3477 (outside the U.S. by calling 973-582-2710) using access code 12656168. Lexmark's Kofax presentation slides will be available on Lexmark's investor relations website prior to the live broadcast.

About Lexmark

Lexmark is uniquely focused on connecting unstructured printed and digital information across enterprises with the processes, applications and people that need it most. For more information, please visit www.Lexmark.com.

About Kofax

Kofax is a leading provider of smart process applications to simplify and transform the First Mile™ of customer engagement. Success in the First Mile can dramatically improve the customer experience, greatly reduce operating costs and increase competitiveness, growth and profitability. Kofax software and solutions provide a rapid return on investment to more than 20,000 customers in financial services, insurance, government, healthcare, supply chain, business process outsourcing and other markets. Kofax delivers these through its direct sales and service organization, and a global network of more than 800 authorized partners in more than 75 countries throughout the Americas, EMEA and Asia Pacific. For more information, visit Kofax.com.

Lexmark and Lexmark with diamond design are trademarks of Lexmark International, Inc., registered in the U.S. and/or other countries. All other trademarks are the property of their respective owners.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this release which are not historical facts are forward-looking and involve risks and uncertainties which may cause the company’s actual results or performance to be materially different from the results or performance expressed or implied by the forward-looking statements. Factors that may impact such forward-looking statements include, but are not limited to, fluctuations in foreign currency exchange rates; failure to successfully integrate newly acquired businesses; continued economic uncertainty related to volatility of the global economy; inability to execute the company’s strategy to become an end-to-end solutions provider; decreased supplies consumption; possible changes in the size of expected restructuring costs, charges, and savings; market acceptance of new products; aggressive pricing from competitors and resellers; changes in the company’s tax provisions or tax liabilities; excessive inventory for the company’s reseller channel; failure to manage inventory levels or production capacity; periodic variations affecting revenue and profitability; inability to realize all of the anticipated benefits of the company’s acquisitions; the failure of information technology systems, including data breaches or cyber attacks; the inability to develop new products and enhance existing products to meet customer needs on a cost competitive basis; reliance on international production facilities, manufacturing partners and certain key suppliers; business disruptions; increased competition in the aftermarket supplies business; inability to obtain and protect the company’s intellectual property rights and defend against claims of infringement and/or anticompetitive conduct; ineffective internal controls; customer demands and new regulations related to conflict-free minerals; fees on the company’s products or litigation costs required to protect the company’s rights; inability to perform under managed print services contracts; the inability to attract, retain and motivate key employees; terrorist acts; acts of war or other political conflicts; increased investment to support product development and marketing; the financial failure or loss of business with a key customer or reseller; credit risk associated with the company’s customers, channel partners, and investment portfolio; the outcome of litigation or regulatory proceedings to which the company may be a party; unforeseen cost impacts as a result of new legislation; changes in a country’s political or economic conditions; disruptions at important points of exit and entry and distribution centers; and other risks described in the company’s Securities and Exchange Commission filings. The company undertakes no obligation to update any forward-looking statement.