Lexmark eyed as a takeover candidate - Company won't comment on speculation

Bank of America has identified Lexington-based Lexmark International as a possible candidate for a leveraged buyout.

The printer maker was one of a handful of companies listed by the bank's researchers as possible targets for these types of deals, which involve taking on debt to help finance the acquisition.

It's another in a long series of rumors during the past several years of possible outside interest in buying Lexmark, which develops and manufactures laser and inkjet printers.

Lexmark spokesman Jerry Grasso said the company declines to comment on rumors and speculation, or on its stock.

The company's stock price has risen dramatically in recent months. In the middle of last year, the stock was hovering around $15 a share. On Tuesday, it closed at $36.82, up 5.53 percent from Monday.

The fact that the stock is trading at its 52-week high makes it attractive.

"These types of deals occur at market tops", said Tom Carpenter, vice president and senior equity analyst at Hilliard Lyons in Louisville.

Carpenter also noted Lexmark has significantly improved its printers during the past couple of years and focused on segments in which people print more.
Lexmark also is attractive, he said, because of the company's cash rese
rves, which are about $15 a share. A drawback, though, is the company's roughly $8 a share of long-term debt.

A great deal of the company's cash is overseas, and that has prevented Lexmark from bringing it to the United States to finance continued repurchases of its stock, because the company would face certain taxes to bring it back. Carpenter said he doubts the overseas money would be a barrier to the deal because "there are people smart enough to find a way around that."

Carpenter said the biggest barrier might be deciding on a price. He said a 25 percent to 30 percent premium on the stock price "would be a home run for shareholders."

He said any number of private equity firms might be interested in Lexmark. Private equity firms use the money invested by their clients to acquire stakes in other companies.

Before the recession, the number of buyouts of publicly traded companies by private equity firms had risen substantially. Generally, a private equity group operates the company for a time, seeks to make it more efficient and then sells the company or parts of it for a profit. The recession slowed down that movement, but Bank of America analysts noted in their report that the deals might return and be smaller in scope, perhaps less than $10 billion.

Lexmark's market capitalization is close to $3 billion.

Private equity firms also tend to eye companies with recurring revenue, which Lexmark boasts, Carpenter said. The company has recently announced some major deals to manage printing for large firms, including regional bank BB&T.

"The managed print services wins are very important because they are predictable recurring revenue streams, and investors and private equity firms love recurring revenue," Carpenter said.

The company already has a history with private equity. It was initially owned by a private equity firm — Clayton, Dubilier & Rice Inc. — when it was spun off from IBM in 1991. The company went public in 1995, and the buyout firm sold its last shares in 1998.

Original Source: Lexmark eyed as a takeover candidate

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HP sues ink cartridge suppliers from Taiwan and Hong Kong

Hewlett-Packard has taken third-party inkjet cartridge manufacturer MicroJet from Taiwan and a few other companies from Hong Kong to the U.S. District Court, Northern District of California (San Francisco), alleging six of their product patents were infringed.

In the 28-page complaint filed on 5 March, HP claimed that these companies's HP-compatible inkjet cartridges infringed six of HP’s patents: US patent Nos. 6,234,598; 6,409,053; 6,398,347; 6,481,817; and 6,402,279. These patents apply mainly to the HP 27/28 and HP 56/57 cartridges and other similar models.

Hewlett-Packard says Taiwan's MicroJet manufactured and sold the allegedly infringing ink cartridges not only under its own brand name, but also sold generic and/or made-to-order products and printheads to other companies, including Mipo and PTC. It claims Mipo and PTC then resold the accused products to the markets, including the US. Sinotime is accused of selling the allegedly infringing products on Amazon under the name "All Colors" and advertising the products as "remanufactured" cartridges.

Facing the infringement accusation, MicroJet responded in a press release, "All products manufactured by us are created with our own research and development efforts." MicroJet says they currently own 251 patents with another 213 patents under examination. In a telephone interview, Alex Chuang, president of PTC from Hong Kong, pointed out, "PTC was established less than two years ago. PTC stands for Professional Toner Cartridges. We mainly carry laser cartridges, OPC drums and toner. We have never sold a single HP compatible inkjet cartridge to the US market. We take no interest whatsoever in the production of compatible inkjet cartridges. As for the cartridges we resell, they are remanufactured products" Mipo defended by saying, "We have no business relations with Microjet. It has never happened that Mipo purchased any of the allegedly infringing products from Microjet."

HP also claimed that Mipo and MicroJet converted more than 300,000 "genuine HP printheads from HP facilities in Asia" HP reported that in 2006 and early March 2007 certain component parts appeared to have been unlawfully taken from its facilities in Asia. And it is reported that trucks carrying HP parts were hijacked while en route from the Singapore factory to a Malaysian assembly plant in March and September 2007. HP says that each genuine HP printhead is marked with a unique product identifier FID. And such an identifier was found in the "Mipo"cartridges acquired by HP from Amazon.

Mipo reponded to this in a statement, "HP's accusation is groundless. Mipo is a professional remanufacturer of printer cartridges. We never converted any cartridges." Some media have given misleading information about the leaking accidents taking place in HP Asian facilities. MicroJet clarified in its statement that it has had absolutely no involvement in any thefts of HP components. Mipo also expressed its resentment against the misleading information given in the media.

The companies being sued by HP include MicroJet from Taiwan, Mipo and its subsidiaries, PTC Holdings Ltd from Hong Kong and Sinotime Technologies Inc. located in Miami. HP seeks a court order blocking infringement plus triple the damages caused by the infringement as well as other monetary awards. MicroJet stated that the compensation would not be determined until the court starts its hearing of the case and comes to a decision. According to their current estimation, this incident will not influence the company’s operations and finances.

MicroJet, Mipo and PTC are now seeking legal advice. And will closely follow the development of the case. Recycling Times will also give timely coverage of this case.

Original Source: HP sues ink cartridge suppliers from Taiwan and Hong Kong

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Nukote Sues Clover for Interference, Unfair Business Practices

Nukote has filed a $100-million lawsuit against Clover Technologies alleging its unfair business practices cost it its Office Depot contracts, thereby forcing it to file for bankruptcy. The complaint sets forth a host of alleged unsavory activity from monopolistic scheming to raiding of employees by Clover. And although Nukote has emerged from bankruptcy, it remains threatened by Clover. In its complaint, Nukote states, “Even today, as Nukote works diligently to regain its place in the market, Clover continues to grind down Nukote under the heel of its market power.”

Clover responded with equally strong language in defense of its actions. In its press release, Clover stated “it is abundantly clear that once again, Nukote is abusing the court system in a transparent and desperate effort to raise capital for a business that is on the verge of collapse.”

In September, Nukote sued Office Depot for breach of contract. That lawsuit also alleges illegal and unethical behavior by Office Depot that includes SEC reporting violations and underpayment of sums due to Nukote so draconian that it “brought the Debtor (Nukote) to its knees.”

In that case, the complaint lays the blame for Nukote’s June 2009 Chapter-11 filing on Office Depot. The complaint also alleges that Office Depot’s activities were partially motivated by its own financial problems.

In May, Nukote and Office Depot ended their 20-year business relationship, in which Nukote supplied Office Depot with as much as $85 million in product annually.Those contracts were subsequently awarded to Clover Technologies.

In June, the decimated Nukote filed for bankruptcy protection. In September, Nukote sued Office Depot, and chose not to sue Clover at that time. The action was filed as an adversary proceeding within the bankruptcy, therefore providing Nukote’s creditors with the promise of a share of any winnings. The plan of reorganization that was approved late last year further provides for such an outcome.
The case against Clover, however, was filed shortly after Nukote emerged from its bankruptcy. This action therefore will be resolved in the sole favor of Nukote if it can prove its allegations. And the case was filed shortly after Nukote incorporated Nukote Illinois, which allowed Nukote to sue Clover in state court since both companies have residence in Illinois.

Clover responded to this maneuver as follows: “the complaint is as empty as the shell corporation Nukote incorporated just this past week to initiate the suit.”

About the Author: Tricia Judge is the executive director of the International Imaging Technology Council. She may be reached at exec@i-itc.org.

Original Source: Nukote Sues Clover for Interference, Unfair Business Practices

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Canon USA honored as one of the best channel vendors

For the second consecutive year, Canon U.S.A., Inc., a leader in digital imaging and advanced office solutions, has been selected by Business Solutions Magazine (BSM) as one of the best channel vendors for the upcoming year. Working with Penn State University, BSM conducted a Web-based survey of their Value-Added-Reseller (VAR) subscribers to rate and rank their vendor partners in the following categories: Service/Support, Channel Friendly, Channel Program, Product Features, Product Reliability, Product Innovation, and Adequate VAR Margins.

"To be honored by BSM as one of the Best Channel Vendors for the second year in a row is a testament to Canon's commitment and dedication of meeting the diversified needs of our channel partners by providing them with the best in office solutions, services and support," said Jim Rosetta, vice president and general manager, Imaging Systems Group, Canon U.S.A., Inc. "We are very proud to receive this prestigious accolade and we look forward to continuing our tradition in excellence into 2010."

During the nearly month-long survey, more than 12,000 votes were cast, resulting in one of the largest and most detailed surveys of its kind. Scores were calculated by BSM editorial staff and Penn State University, with overall vendor scores determined by adding the cumulative scores of the seven categories and dividing that score by the number of VAR subscribers who rated them. Vendors were broken down into a variety of technology categories for the survey and those who received too few votes were excluded from consideration. VAR subscribers rated its vendor partners in a scale of 0 (worst) to 5 (best) in seven different categories. This year's results show Canon received higher ratings in every category compared to last year.

Canon works closely with the value-added-reseller channel to provide a wide variety of its imageFORMULA document scanners, network scanners, and check transports, as well as imagePROGRAF large format printers and imageCLASS multifunctional printers.

Original Source: CANON U.S.A. HONORED AS ONE OF THE BEST CHANNEL VENDORS BY BUSINESS SOLUTIONS MAGAZINE

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