Clover acquires LMI assets
September 16, 2019
Over the weekend the news broke that Clover Imaging Group has agreed to purchase LMI Solutions’ business assets, subject to approval by the court overseeing LMI’s receivership process.
On Friday 13 September the news broke that Clover Imaging Group has signed a definitive agreement to purchase LMI Solutions’ business assets. Subject to approval by the court overseeing LMI’s receivership process, Clover Imaging will purchase all of LMI’s inventory, intellectual property rights and manufacturing equipment.
Jim Cerkleski, Chairman, Clover Imaging Group, said: “The purchase of LMI’s business assets enhances our capabilities, customer reach, and demonstrates our confidence in the strength of the imaging supplies market. Clover offers the only true alternative to OEMs with significantly higher margins for our reseller partners. In addition, with the focus on environmental sustainability at an all-time high, we are seeing businesses and consumers alike abandoning single-use cartridges for our lower cost, environmentally conscious printing solutions. We are excited for the future.”
The company added: “Clover welcomes LMI’s customers. Clover will be providing the same superior customer service to which customers are accustomed and they can expect no disruption to service.”
No details about the LMI staff and remanufacturing facilities were disclosed.
In August, The Recycler reported that following an application by Midcap Funding, the Arizona Superior Court appointed MCA Financial Group as receiver of Phoenix-based LMI Solutions.
In August 2018, PE investor, Turnspire Capital Partners (Turnspire) made a strategic investment, in LMI to help position LMI’s long-term market position. At the time of the deal Turnspire Managing Partner Ilya Koffman said, “We are delighted to partner with Gary Willert and the Willert family on the LMI investment”…“We intend to continue building LMI, both organically and through select acquisitions. We look forward to what we can accomplish together with the talented management and employees of LMI.”
However, the news of the new HP and Xerox deal saw Turnspire look to exit the LMI the market and The Recycler understands that approaches were made to several companies to acquire LMI. However potential buyers could not reconcile the market value of LMI with the outstanding PE investment and MCF called in the loan, initiating the receivership.
LMI’s main remanufacturing competitor in the US market is Clover Imaging Group, whose parent 4L Technologies is carrying around $700 million (€624 million) of debt and recently appointed legal and investment advisors to assist them in reviewing their business following the loss of a major customer.
Both companies have been impacted by both the HP and Xerox new business relationship and have been competing against each other in the independent dealer channel.
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