It did not take Ursula Burns long to put her stamp on Xerox Corp. as CEO, as the Norwalk-based company reached a $6.4 billion agreement to acquire Affiliated Computer Services, a massive provider of outsourcing services.
Dallas-based ACS bills itself as the world’s largest, diversified business-process outsourcing (BPO) company, closing its 2009 fiscal year ending June 30 with a $350 million profit on $6.5 billion in revenue.
ACS manages 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. ACS is the largest provider of managed services to government entities in the United States, with 1,700 federal, state and municipal agencies in its customer base.
“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,” said Burns, who replaced Anne Mulcahy as CEO on July 1. “A game-changer for Xerox, acquiring ACS helps us expand our business and benefit from stronger revenue and earnings growth.”
The companies hope to complete the deal in the first quarter of 2010. ACS shareholders will receive a total of $18.60 per share in cash plus 4.935 Xerox shares for each ACS share they own. In addition, Xerox will assume ACS”™ debt of $2 billion and will issue $300 million of convertible preferred stock to ACS”™ Class B shareholder.
Xerox expects the merger to result in annualized cost savings between $300 million and $400 million, in part from using ACS”™ expertise in back-office operations to handle some of Xerox”™s internal functions.
