MonoType (NASDAQ: TYPE) is in the business of licensing typefaces, commonly referred to as fonts. The company boasts the world's largest library of typefaces, which include well-known fonts such as Times New Roman and Helvetica. The company also sells software used to render fonts on devices and applications for creative professionals to design their own fonts and branding. The world of licensing fonts isn't a fast-growing one, and MonoType has historically used acquisitions to bolster its revenue. However, the company hasn't made an acquisition since 2016; meanwhile, it has seen its revenue start to decline. Pressured by weak financial results and a declining share price, the company has now become an acquisition target itself and is increasingly the subject of buyout rumors. Acquisition-fueled growth strategy MonoType's legacy business of licensing fonts to tech and media companies is fairly mature and has seen flat to negative revenue growth trends in recent years. That's where acquisitions can help. Company Acquired Year Size Description Olapic 2016 $123.7 million Marketing software for social media promotion Swyft Media 2015 $17 million Mobile messaging FontShop 2014 $14.6 million Font distributor Mark Boulton Design 2014 $0.8 million Web design studio Design by Font 2012 $4.6 million Web strategy and design Bitstream 2012 $49.6 million Typeface library and store Ascender 2010 $11 million Font provider Data source: MonoType financial Reports. MonoType was formed by a private equity company to consolidate the typeset industry. After going public in 2007, it stuck to buying other typeset companies for much of its existence but has more recently focused on acquiring marketing software companies. This shift is likely due to a lack of viable acquisition targets in the typesetting industry. At this point, MonoType is one of the largest players in the space, and making tiny acquisitions won't move the needle for the company. On the other hand, making acquisitions outside of its legacy markets could end poorly if MonoType gets into businesses it doesn't understand. The cracks in MonoType's acquisition strategy are starting to show. Its most recent acquisition, Olapic, was also its largest. Olapic is a business that helps brands generate content for blog posts and social media, and MonoType bought it to capitalize on the growth in servicing digital brand campaigns. More than two years after the acquisition, Olapic is no longer growing. In fact, last quarter the company noted that Olapic saw revenue decline. Data by YCharts. MonoType is now in a difficult position as it no longer has a clear avenue for growth. The company's legacy business is mature and its effort to diversify into digital marketing isn't paying off. MonoType can chase growth with more acquisitions, but it risks overpaying for deals or buying businesses it won't be able to effectively manage. Buyout interest Despite these strategic woes, MonoType is reportedly considering possible buyout options from private equity firms. It makes sense that private equity would be interested in MonoType. Although the company has shown poor organic growth, its business is fairly stable. Tech companies will continue to pay MonoType for the license to use popular fonts like Times New Roman, and mobile devices will continue to need software to render those fonts. The business is also quite profitable, boasting an 84% gross profit margin as well as a healthy operating margin. However, investors shouldn't put too much hope in a buyout just yet. The rumors still haven't been officially confirmed, and come after MonoType failed to sell itself last year. The company disclosed that it spoke to 28 potential buyers in 2018 but didn't lock down any offers. After reporting a decline in revenue and earnings last quarter, the company is in worse financial shape. The silver lining for a buyer is that with the stock down, an acquisition might be accomplished at a lower price. Image source: Getty Images. To sell or not to sell A buyout wouldn't be a bad outcome for MonoType shareholders. The company's core business operates in a mature industry, and the attempts to use acquisitions to diversify into new lines of business have not yet paid off. MonoType is in a strategic bind: If it chooses to do nothing, it will likely see its financial results continue to trend lower; if it pursues more acquisitions, it opens itself up to a host of other operational risks. Until a formal buyout offer comes, shareholders should be focused on the business at hand. 10 stocks we like better than Monotype Imaging HoldingsWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. 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