January 12, 2016 / 8:55 PM / 2 years ago

Exclusive: Printing services company Lexmark considers breaking up - sources

(Reuters) - Printing services company Lexmark International Inc LXK.N is considering the possibility of divesting its hardware and software assets separately to revive interest in its sale process, according to people familiar with the matter.

The deliberations come after Lexmark held discussions with several potential buyers about the sale of the entire company that have yet to result in offers that would be line with its valuation expectations, the people said this week.

Private equity firms are now having conversations with Lexmark about acquiring either its hardware or software assets, the people said. The company has yet to make any decision on a way forward, the people added.

The sources asked not to be identified because the details of the sale process are confidential.

“Lexmark does not intend to comment on the exploration process or disclose further developments until the board approves a specific transaction or otherwise concludes the exploration of strategic alternatives,” the company said in a statement.

Lexmark, which has a $1.74 billion market capitalization, announced in October that it was exploring strategic alternatives, including a sale, and had hired Goldman Sachs Group Inc (GS.N) as an adviser.

    Over the past few years, Lexmark has sought to diversify and aggressively bought up software assets to bulk up its services catering to business customers. Last year it bought Kofax Ltd for about $1 billion, a company which provides data services to financial, insurance and healthcare companies.

    At the time, Lexington, Kentucky-based Lexmark said the deal would double the size of its enterprise software unit to a $700 million business.

    Lexmark’s software can scan everything from spreadsheets to medical images, and provides services to banking, healthcare, insurance and retail companies. While the software business has a higher growth rate, it represents a small portion of revenue compared to the hardware business.

    Reporting by Greg Roumeliotis and Liana B. Baker; Editing by Chris Reese

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