Xerox purchases Affiliated Computer Services for $6.4 billion
In what seems like an endless stream of mergers as of late, it was announced this morning that Xerox is purchasing Affiliated Computer Services.
Just last Monday we were reporting on Dell buying Perot Systems for $3.9 billion, and not long before that was the news of Disney buying Marvel Entertainment, and now comes the news that the Xerox Corporation is purchasing Affiliated Computer Services (ACS) in a deal estimated at $6.4 billion. The value was set at a price of $63.11 a share at the close of business on Sept. 25th.
ACS is a provider of information technology services and business process outsourcing solutions to businesses, government agencies and non-profit organizations based in Dallas, TX. The company currently employs approximately 74,000 people. 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. Xerox will be assuming the current debt from the company that is estimated at $2 billion.
This new acquisition will boost the value of Xerox to $22 billion, with recurring revenue of $17 billion annually.
“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.”
Under the terms of the agreement, current shareholders will receive a total of $18.60 per share in cash plus 4.935 Xerox shares for each ACS share they own.
Where exactly this deal came from is unclear, but like the Dell/Perot Systems deal, it just kind of came out of the blue. How ACS will fit into the corporate structure of Xerox also isn’t made clear, nor how many of the 74,000 employees will retain their jobs. All I know is, someone sure seems to have forgotten to tell all of these companies about the recession.
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October 6th, 2009
I do not understand it also and I am a xerox employee. First no raises then no matching of our 401K. Hours are cut back for contractors making it more stressful and hours for employees but you are not to have any overtime. Then you go out and purchase a company for SIX BILLION DOLLARS! I hope they know what they are doing if not Sell your stock while you got a chance.