Xerox To Acquire Affiliated Computer Services
This is a Vendor Newsfeed Posted by Mike Fratto- Editor
September 28, 2009
NORWALK, Conn., and DALLAS, Sept. 28, 2009 - Xerox Corporation (NYSE:XRX) and Affiliated Computer Services, Inc. (NYSE: ACS) today 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 Sept. 25. This acquisition will transform Xerox into the leading 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 expertise 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.
"Xerox becomes a $22 billion global company, of which $17 billion is recurring revenue - a significant boost to our profitable annuity stream," she added. "The revenue we generate from services will triple from $3.5 billion in 2008 to an estimated $10 billion next year."
Under the terms of the agreement, 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's debt of $2 billion and issue $300 million of convertible preferred stock to ACS's Class B shareholder. On an adjusted earnings basis, the transaction is expected to be accretive in the first year.