Xerox Holdings Corporation has announced the formation and capitalisation of a new joint venture between Xerox and TPG, a leading global alternative asset management firm.
Joe Lenz, Partner and Co‑Head of Research, TPG Credit Solutions has commented:
“TPG is pleased to be a capital partner to Xerox and have the opportunity to help strengthen its balance sheet and support the execution of its long‑term growth strategy.”
Why form a standalone joint venture?
A company may form a standalone joint venture to manage and monetise its intellectual property (IP) because it unlocks value, reduces risk, and increases strategic flexibility without disrupting the core business.
Xerox, in a company statement have indeed stated almost that, stating:
The Joint Venture is structured as an intellectual property holding and licensing entity designed to manage, protect, and monetize certain Xerox IP assets.
Key reasons could include:
- Unlocking hidden value
IP often sits on the balance sheet at well below its true market value. A dedicated IP entity can license, enforce, or commercialise those assets more aggressively and transparently. - Raising capital
To generate immediate liquidity while retaining operational control through long-term licensing rights. - Improve the balance sheet
Proceeds could be used to pay down debt if it is there, or the company could fund more acquisitions (although aquiring Lexmark was quite a leap), or invest in transformation, and sometimes forming a joint venture is a more efficient way than traditional financing methods. - Specialised management and protection
An IP-focused entity brings dedicated governance, legal protection, and monetisation expertise that operating companies often lack internally. - Reducing risk and exposure
Separating IP helps ring-fence legal, licensing, or enforcement risks from the main operating business. - Maintain continuity and control
Well-structured agreements ensure the company keeps uninterrupted rights to use its brand and technology, so customers see no disruption.
Louie Pastor, president and chief operating officer at Xerox, explains the reasoning behind Xerox’s decision, stating:
“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. The acquisitions of ITsavvy and Lexmark created a diversified and scaled platform that positions us to deliver meaningful value for our clients, partners, and shareholders, starting with our guidance of more than $200 million in expected operating income growth in 2026. The Joint Venture builds on these efforts and enables Xerox to unlock additional value from our well recognized trademark and intellectual property assets. We look forward to partnering with TPG and leveraging their support as we continue executing this disciplined transformation.”
What is the money to be used for?
The Joint Venture has raised $450 million and the proceeds of the Joint Venture Financing were distributed to Xerox and are expected to be used for:
- general corporate purposes, including augmenting liquidity,
- accelerating the Company’s Reinvention (including the Lexmark integration), and
- opportunistically addressing the Company’s capital structure over time, which may include the redemption or repayment of debt.
As part of this structure, Xerox and the Joint Venture entered into a long-term shared services and license agreement that preserves the Company’s full, uninterrupted ability to use the Xerox name, trademark, and other transferred IP across all global operations, ensuring continuity in how Xerox presents itself and serves clients.
