Apex Technology, a Chinese company that manufactures ink cartridge chips, is in negotiations to acquire U.S. based printer and imaging systems provider Lexmark International.

UPDATE 5-5-2016

Apex Technology has agreed to acquire Lexmark for approximately US$4 billion in cash. The Chinese buyout, which is expected to close in the second half of 2016, is subject to regulatory approvals in the United States, including by the Committee on Foreign Investment in the United States, or CFIUS.

Lexmark’s two business groups, as well as the company’s regional and country operations, will continue unaffected and its headquarters will remain in Lexington, Kentucky.

The potential deal with Apex represents an opportunity for Lexmark to sell itself as a whole, after an earlier auction did not produce satisfactory offers. In case you missed it (and I have) Lexmark has also been exploring selling its software and hardware assets separately, announced last October.

The surprising part? Just last year Lexmark bought Kofax for a staggering $1 billion, a company which provides data services to financial, insurance and healthcare companies. And in 2014 it bought Readsoft for $254 million. In 2013 it bought Saperion for $280 million. In 2012 it bought Brainware for $154 million. In 2010 it bought Perceptive Software for $280 million. And now Lexmark is said to have a $2 billion market capitalization. So what’s going on here?

Rationale

So what’s the deal behind this bold, surprising move? Well, 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. Like other printer makers, Lexmark has struggled to adjust as its corporate clients cut costs and consumers shift to mobile devices from personal computers. Even buying Kofax and Readsoft didn’t help.

UPDATE