Xerox to Acquire Affiliated Computer Services for $6.4B
According to Xerox’s Monday statement, the purchase accelerates Xerox’s expansion in the $150 bn. business process outsourcing sector.
“By mixing Xerox’s strengths in document technology with ACS’s experience in managing and automating work processes, we’re creating a new class of solution provider,” Xerox general manager Ursula M Burns claimed in a press release. “A game-changer for Xerox, taking ACS helps us expand our business and benefit from stronger cash and revenues growth”.
With the addition of ACS, Xerox becomes a $22 bn. world firm for document technology and business process management, $17 bill being repeated cash.
“The money we generate from services will triple from $3.5 bln in 2008 to a projected $10 bill next year,” Burns claimed. Xerox wants to achieve increase its cash by leveraging Xerox’s robust worldwide brand and established customer relations to scale ACS’s business in Europe, Pacific Rim and South America. Xerox will also integrate its intellectual property with ACS’s services to make new solutions for end-to-end support of customers’ work processes.
Considered the biggest managed services supplier to central authority entities in the USA, ACS provides solutions for managing paper-based work processes and provides specialised BPO and IT services for industries that range between telecomms, retail and money services to health care, education and transport. Xerox is expecting to save as much as $400 million in operating costs yearly in the 1st 3 years following the close of the transaction, based totally on cost reductions related to public company costs, acquisition and using ACS’s expertise in back-office operations to handle some of Xerox’s internal functions.
“We’re pleased with our important moneymaking growth over the last twenty years and our capability to control our clients’ operations with a world infrastructure and workforce,” ACS president and general manager Lynn Blodgett claimed in a press release. “We also know that for ACS to grow globally and differentiate our offerings thru technology, we need a partner with incredible brand strength and leading invention. Xerox offers that and more to bring our business to a higher level while bracing theirs”. The purchase is subject to the closing conditions of domestic and foreign regulatory approvals, as well as the approval of ACS and Xerox investors.
The exchange has been authorized by the Xerox and ACS boards of directors and ACS special committee and is expected to close in Q1 of 2010. ACS will operate as an independent organization and initially will be branded “ACS, a Xerox Company,” led by Blodgett, who will report to Ursula Burns.