Xerox Corporation announced today that it intends to acquire Affiliated Computer Services, Inc., a business process outsourcing provider, in a cash and stock transaction valued at $6.4 billion. With this acquisition, Xerox says it will position itself for a leading role in document and business process management.
ACS is a $6.5-billion company with revenue growth of six 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 expertise in managing and automating work processes, we're creating a new class of solution provider," says Xerox chief executive officer Ursula Burns. "A game-changer for Xerox, acquiring ACS helps us expand our business and benefit from stronger revenue and earnings growth."
ACS's expertise is in managing paper-based work processes and providing specialized 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 five percent per year. Through its multi-year contracts with more than 1,700 federal, state, county and local governments, ACS is the largest provider of managed services to government entities in the United States.
The transaction, which has been approved by the Xerox and ACS boards of directors and ACS special committee, is expected to close in the first quarter of 2010. ACS will operate as an independent organization and initially will be branded ACS, a Xerox Company. 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.
For more information about Xerox, go here.
For more information on ACS, go here.