Analysis | 30 Sep 2009 :
Game changer: Xerox CEO Ursula Burns
Photocopier and imaging giant Xerox is buying Dallas-based outsourcing specialist Affiliated Computer Services (ACS) for $6.4 billion in a move to "change Xerox's game," according to CEO Ursula Burns.
Burns said: "Acquiring ACS helps us expand our business and benefit from stronger revenue and earnings growth." She added: "Xerox [now] becomes a $22 billion global company, of which $17 billion is recurring revenue - a significant boost to our profitable annuity stream."
Burns, announcing Xerox's first major deal since she took the helm from retiring CEO Anne Mulcahy last July, reckons the firm's revenue from services would triple next year, to $10 billion from 2008's $3.5 billion.
Explaining the acquisition, Burns said simply: "We're creating a new class of solution provider."
Expanding on Burns's statement, ACS CEO Lynn Blodgett said the driver behind the acquisition was a desire for global expansion plus the need "differentiate our offerings through technology."
Under the takeover terms, Blodgett stays on as chief executive while reporting to Burns.
ACS outsources processes in the fields of financial services, healthcare, retail, and telecommunications, among others. It is the largest provider of managed services to US government organisations.