Printer and copier manufacturer Xerox Corp. (XRX) Monday said it has completed the acquisition of BPO and IT services provider Affiliated Computer Services, Inc. (ACSEF.PK).
ACS would operate as an independent company under Xerox and initially be branded as ACS. It would continued to be led by its current president and chief executive officer Lynn Blodgett, who had been elected by the Xerox Board of Directors as an executive vice president of the corporation. Blodgett would report to Xerox's chief executive officer Ursula Burns.
Norwalk, Connecticut-based Xerox in a statement said it is trying to focus more on information management and business processes and less reliant on printed documents, and through the acquisition, the company expects to get an opportunity for growth in the growing business process outsourcing market. Through the acquisition, Xerox expected to save $300 million to $400 million annually in the first three years by curtailing back office, procurement, and other costs related.
Burns said, "With ACS, we take another step forward, expanding our leadership to include business process outsourcing that helps simplify document-driven work."
Recently, more than 85% of the shareholders of both the companies voted to approve the deal. Xerox is valuing ACS at $63.11 per share. ACS shareholders stand to get $18.60 in cash and 4.935 Xerox shares for each ACS share. Xerox has also agreed to purchase ACS' $2 billion debt.
Dallas-based ACS, with its 74,000 professionals, offers BPO support in areas including finance, human resources, information technology, transaction processing, and customer care. Through a combination of services, technology and innovation, the combined company is expected to pursue a $500 billion market focused on document and process management for businesses and governments.
In the recently concluded second quarter, ACS reported net income of $96 million or $0.97 per share on revenues of $1.66 billion.
XRX is currently trading at $8.35 per share, down 1.42%, on the New York Stock Exchange.
ACSEF.PK closed Friday's regular trading at $1.14 per share.
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