Xerox To Acquire Affiliated Computer Services

Xerox Corporation and Affiliated Computer Services have announced a definitive agreement for Xerox to acquire ACS in a cash and stock transaction valued at $63.11 per share or $6.4 billion as of the closing price of Xerox stock on September 25. This acquisition will transform Xerox into a global enterprise for document and business process management, and will accelerate its growth in an expanding market.

The world’s largest diversified business process outsourcing (BPO) firm, ACS is a $6.5 billion company with revenue growth of 6 percent and new business signings of $1 billion in annual recurring revenue during its fiscal 2009.

“By combining 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,” said Ursula M Burns, Xerox chief executive officer. “A game-changer for Xerox, acquiring ACS helps us expand our business and benefit from stronger revenue and earnings growth.”

Lynn Blodgett, president and chief executive officer, ACS, said, “We know that for ACS to expand globally and differentiate our offerings through technology, we need a partner with tremendous brand strength and leading innovation. Xerox offers that and more to bring our business to the next level while strengthening theirs.”

ACS’s expertise is in managing paper-based work processes and providing specialised BPO and information technology services for industries that range from telecommunications, retail and financial services to healthcare, education and transportation. Business process outsourcing is estimated to be a $150 billion market, growing at a rate of 5 percent per year.

With this acquisition, Xerox is confident it will achieve significant incremental revenue growth by leveraging Xerox’s global brand and established client relationships to scale ACS’s business in Europe, Asia and South America. In addition, Xerox will integrate its intellectual property with ACS’s services to create new solutions for end-to-end support of customers’ work processes.

The acquisition is subject to customary closing conditions, including the receipt of domestic and foreign regulatory approvals and the approval of ACS and Xerox stockholders.