The markets have backed the move by Lexmark to splash out $1bn for business process management player Kofax with shares for both firms rising after the announcement of the tie-up.
The offer from Lexmark represented a 47% premium on the Tuesday close of Kofax shares and provides the printer vendor with another avenue to go down rather than just relying on its core market.
With the addition of Kofax the enterprise software side of Lexmark's business almost doubles to $700m and follows on from the acquisition last year of document management firm ReadSoft.
Lexmark believes that the content and process management software market is worth around $10bn and it is expanding at a growth rate of around 10% a year.
Paul Rooke, Lexmark chairman and CEO, said that the deal extended the vendor into the "high-growth smart process applications market".
“Kofax accelerates Lexmark’s development of industry-specific solutions while also immediately expanding our reach into the mid-market, where there is increasing demand for technology to better manage the growing amount of unstructured information and improve customer engagement,” he added.
In its most recent set of results, which came out at the end of January, Lexmark managed to record 37% growth with its own Perceptive Software operation and Rooke commented at the time on its plans to change the shape of the company.
"we are transforming Lexmark to a higher value portfolio. And to achieve this, we’re focused on a broader market opportunity helping our customers solve their unstructured information challenge. And this opportunity is complementary to printing but it goes well beyond printing incorporating high value solutions and software," he said at the time.
In response to the acquisition, the view from Kofax was that a deal would be the best way of securing its own future and it would complement existing Lexmark enterprise software efforts.
“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 Bish, CEO of Kofax.
The Kofax board has given the deal the thumbs up and so have a sizeable chunk of the shareholders so the deal should close in the second quarter.