Lexington, KY – Lexmark has increased its offer for outstanding shares in the Swedish software company ReadSoft after two previous efforts have been thwarted by the British subsidiary of an Ohio company also seeking to purchase ReadSoft.
Business Lexington
“When we first made our initial offer we thought and continue to believe that ReadSoft is a strong value, we believe it’s a strong strategic combination with Lexmark to help us not only expand our software business but give us a good market position in Europe as well,” Lexmark Chairman and CEO Paul Rooke said in a Monday morning interview with about his company’s $224 million dollar offer that is the equivalent to 50.00 Swedish Krona (SEK) per share.
Lexmark has announced offers of $182 million and $194 million in attempts to purchase ReadSoft since May. Within a month of each offer, Hyland UK, a British subsidiary of Westlake, Ohio-based Hyland Software has stepped in to offer more for the outstanding shares of ReadSoft. In Hyland’s latest move last week, the company announced it had purchased slightly more than 10 percent of ReadSoft which could negate Lexmark’s $192 million dollar offer that included a caveat of 90 percent acceptance by shareholders.
“Given Hyland’s move of gaining control of a little more than 10 percent of the shares, then we needed to redo our offer to waive that condition of 90 percent which we’ve now done,” Rooke said.
This is the first time Lexmark has sought to purchase a publicly traded company, according to spokesman Jerry Grasso. It is also the first bidding war the company has encountered since starting its trend of buying software firms in 2010 as a way to transition from being a printer company to a document solutions company.
Rooke said he expect the third time to be a charm in their attempt to purchase ReadSoft’s A and B shares, the latter of which were valued at just SEK 18.40 the day before Lexmark announced its intentions to purchase ReadSoft in May. Those shares can now be sold to Lexmark for SEK 50.00.
“[It] is a strong offer and we fully expect the ReadSoft shareholders to accept our new offer,” Rooke said.
The ReadSoft software that the two companies have been fighting for captures, classifies, sorts and routes both hard copy and digital business documents, provides approval workflows and extracts and verifies relevant data before depositing it into a customer's systems of record.
The company’s applications include invoice processing, accounts payable automation and sales order processing. Its software also automates a wide variety of business processes like claims, applications and questionnaire processing across a number of industry segments.
ReadSoft operates in 70 countries and has more than 12,000 customers worldwide including BASF, Siemens, Bosch, HSBC, ING, Lego and John Deere. The company has 625 employees and reported revenue of $117 million in 2013.
If successfully purchased by Lexmark, ReadSoft would be absorbed by Lexmark’s suburban Kansas City-based Perceptive Software. If this offer proves successful, Rooke said the sale should close in the last few days of August.