Outsourcing Toolkit

Xerox to acquire Affiliated Computer Services

Tom Espiner ZDNet UK

Published: 28 Sep 2009 16:42 BST

Print technology company Xerox has announced that it will buy business-process outsourcing firm Affiliated Computer Services in a deal worth $6.4bn.

The deal will augment Xerox's global document and print management business, already in business relationships with organisations in the UK, including the NHS.

Xerox will give Affiliated Computer Services (ACS) shareholders $18.60 (£11.70) per share in cash plus 4.935 Xerox shares, in exchange for each ACS share they own, Xerox said in a statement on Monday.

Ursula Burns, Xerox's chief executive, said the acquisition would make both companies more robust.

"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 in the statement.

"A game-changer for Xerox, acquiring ACS helps us expand our business and benefit from stronger revenue and earnings growth."

Burns said Xerox estimated that its revenue would triple from $3.5bn in 2008 to $10bn next year as a result of the acquisition.

ACS is the largest managed services provider to the US government, with over 1,700 ongoing contracts. The company manages paper-based processes, as well as providing BPO and IT services.

Xerox intends to expand ACS in Europe, Asia and South America, and to integrate its intellectual property to create products. Xerox will also use ACS for Xerox's own internal back-office functions.