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Xerox Corp., which has branded itself as “The Document Company,” has taken a massive step in expanding that image with the $6.4 billion purchase of Dallas-based Affiliated Computer Services Inc., a company that specializes in information services around paper-based business processes, such as invoices.
Norwalk, Conn.-based Xerox (NYSE: XRX) says it will use cash and stock to buy ACS (NYSE: ACS). With Xerox stock values at $63.11 per share as of the closing on Sept. 25, the deal adds up to the $6.4 billion amount. ACS shareholders will get a total of $18.60 per share in cash plus 4.935 Xerox shares for each ACS share they own. Also, Xerox will assume ACS’s debt of $2 billion and issue $300 million of convertible preferred stock to ACS’s Class B shareholder.
According to Xerox officials, ACS is the world’s largest business process outsourcing firm, and signed $1 billion in new annual recurring revenue during its fiscal 2009.
ACS focuses on industries that include telecommunications, retail, financial services, health care, education and transportation. The company also has multi-year contracts with more than 1,700 federal, state, county and local governments, and is the largest provider of managed services to government entities in the United States, according to Xerox officials.
Xerox says the sale, which has been approved by the Xerox and ACS boards of directors and an ACS special committee, is expected to close in the first quarter of 2010.
For 2008 Xerox reported a profit of $230 million, on revenue of $17.6 billion.
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