Xerox Corp (NASDAQ:XRX) shares jumped 6% on Tuesday following the announcement that the company has formed a joint venture with TPG to hold and commercialize specified intellectual property assets.
The newly established joint venture obtained $450 million in financing led by TPG Credit. Xerox will receive the proceeds, which the company said will be applied to general corporate purposes. Those uses include strengthening liquidity, accelerating the company's Reinvention initiative - a program that encompasses the integration of Lexmark - and potentially addressing Xerox's capital structure over time.
Under the transaction, Xerox contributed certain intellectual property assets to the joint venture in return for equity interests in the entity. The company also entered into a long-term shared services and license agreement with the joint venture that preserves Xerox's full ability to use its name, trademark, and other transferred IP across all of its global operations.
"This financing strengthens our balance sheet and completes the liquidity‑enhancing actions we began in the fall, with the objective of ensuring Xerox is well-capitalized and positioned to advance our long‑term strategy," said Louie Pastor, president and chief operating officer at Xerox.
Pastor emphasized that Xerox's recent acquisitions, including ITsavvy and Lexmark, have created a more diversified platform intended to drive value. The company reiterated its guidance of more than $200 million in expected operating income growth in 2026 as a result of these moves.
Advisors on the transaction were named in the announcement. Lazard served as financial advisor to Xerox. Legal counsel for Xerox came from Kirkland & Ellis LLP. Wachtell, Lipton, Rosen & Katz served as legal advisor to TPG.
Context and implications
The deal effectively shifts selected IP into a vehicle partially financed by outside capital while preserving Xerox's operational rights to that IP worldwide. The financing provides immediate liquidity that Xerox can deploy across corporate needs and integration efforts tied to its Reinvention strategy.
What the company said
- Financing amount: $450 million, led by TPG Credit.
- Proceeds: distributed to Xerox for general corporate purposes, liquidity, Reinvention acceleration, and potential capital structure actions.
- Structure: Xerox contributed certain IP to the joint venture in exchange for equity; long-term license and shared services agreement preserves Xerox's use of transferred IP globally.