Xerox to acquire ACS for $6.4 billion

Photocopier giant Xerox has announced it is acquiring US firm Affiliated Computer Services (ACS) for $6.4 billion.  The deal will provide Xerox with data management and technology outsourcing capabilities, allowing it to gain a foothold in the rapidly expanding business process outsourcing (BPO) market.  Norwalk, Connecticut-based Xerox is the worldÔÇÖs biggest supplier of digital printer and document management services. It has said it will take on ACSÔÇÖs $2 billion of debt as part of the takeover. Dallas, Texas-based ACS provides IT services to industries such as retail, financial services and education. After the acquisition is finalized, it will operate as a stand-alone firm. The two companies expect to achieve savings of up to $400 million over the next three years as a result of the deal. There will be some job losses but it is expected that the takeover will lead to expansion in the long-term.  Xerox will become a $22 billion company after the takeover, with revenue generated by services expected to reach $10 billion next year.  "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, CEO of Xerox.  "A game-changer for Xerox, acquiring ACS helps us expand our business and benefit from stronger revenue and earnings growth.ÔÇØ  Darwin Deason, founder and chairman of ACS, commented: "This is a tremendous outcome for our shareholders driven by the commitment of a strong management team and incredibly dedicated employees.  ÔÇ£At closing, I will become one of the combined company's largest individual shareholders, and I intend to remain a long-term investor because I could not be more optimistic about the future of the combined company."  The transaction, which has been approved by the Xerox and ACS boards of directors, is subject to shareholder approval. It is expected to close in the first quarter of 2010.  ACS employs 74,000 people and Xerox 57,000. * ┬á┬á┬á┬á┬á┬á┬á*┬á┬á┬á┬á┬á┬á┬á *