Xerox to buy Affiliated Computer for $5.75 billion
NEW YORK — Xerox Corp. has agreed to buy Affiliated Computer Services Inc. for about $5.75 billion in cash and stock in a deal that will boost the size of its document management business and take it another step away from its roots as a printer company.
The deal, announced Monday, calls for Xerox to pay $63.11 for each ACS shares and will create a $22 billion business that will mesh both printing and copying services with the information technology and outsourcing components of Dallas-based ACS.
The price is a 33 percent premium over ACS’s closing stock price on Friday. Xerox shares fell 60 cents, or 6.6 percent, to $8.42, in premarket trading while ACS shares jumped $12.75, or 27 percent, to $60.
“Acquiring ACS helps us expand our business and benefit from stronger revenue and earnings growth,” Xerox CEO Ursula Burns said in a statement.
The acquisition marks the first big move by Xerox since Burns took charge of the company July 1. Although financially healthy, Xerox has been hurt by the slowdown in supply and equipment spending by businesses during the recession. Apart from selling printers, most of its revenue comes from leasing equipment and charging for supplies and document management.
Xerox said buying ACS will triple its services revenue to an estimated $10 billion next year.
ACS, a $6.5 billion company, had fiscal 2009 revenue growth of 6 percent and new business signings of $1 billion in annual recurring revenue.
ACS stockholders will receive $18.60 per share in cash plus 4.935 Xerox shares for each ACS share they own. Xerox, based in Norwalk, Conn., will also take on $2 billion of ACS’s debt and issue $300 million of convertible preferred stock to ACS’s Class B shareholder.
With about 91 million ACS shares outstanding, that would value the deal at $5.75 billion. The companies are valuing the deal at $6.4 billion.
The acquisition, which was approved by both companies’ boards, is anticipated to add to adjusted earnings results in the first year.
Xerox expects to save $300 million to $400 million in the first three years after the deal closes, which is targeted for the first quarter of 2010.
ACS will function independently upon the transaction’s completion, and will initially be branded as ACS, a Xerox Co. The company will be headed by its CEO Lynn Blodgett, who will report to Burns.
AP Business Writer Michelle Chapman in New York contributed to this story.
Related News
Xerox buying Affiliated Computer Services as printer company beefs up services businessSeptember 30th, 2009 Xerox to buy Affiliated Computer for $6.4 billionNEW YORK — Xerox Corp. has agreed to buy Affiliated Computer Services Inc.
Stocks jump as investors see burst of takeovers as good sign for a recoverySeptember 30th, 2009 Xerox, Abbott deals boost stocks; Dow gains 135NEW YORK — Corporate dealmaking is boosting investors' hopes for a recovery in the economy. Stocks jumped Monday after Abbott Laboratories said it would buy the pharmaceutical business of Belgian chemicals maker Solvay for $6.6 billion and Xerox Corp.
Stocks jump as investors see takeovers as optimistic sign for a recovery in economySeptember 30th, 2009 NEW YORK — Corporate dealmaking is boosting investors' hopes for a recovery in the economy. Stocks jumped Monday after Abbott Laboratories said it would buy the pharmaceutical business of Belgian chemicals maker Solvay for $6.6 billion and Xerox Corp.
Xerox joins race to boost tech offerings with $6 billion deal for Affiliated Computer ServicesSeptember 30th, 2009 Xerox in $6B deal to expand tech services businessNEW YORK — Xerox Corp. said Monday it will buy Affiliated Computer Services Inc.
Johnson & Johnson, Xerox, Abbott Labs, Applied Materials are among big market movers MondaySeptember 30th, 2009 Johnson & Johnson, Xerox, Abbott Labs big moversNEW YORK — The following stocks were among those that moved substantially or traded heavily Monday on the New York Stock Exchange:
NYSE:
Johnson & Johnson, up 65 cents at $61.27
The health care giant is jumping into the vaccine business by taking an 18 percent stake in Dutch biotechnology company Crucell NV. Accenture Ltd., up $1.77 at $37.89
A Wall Street analyst upgraded the consulting and outsourcing company to "Buy" and predicted improvement in its margins.
Analyst boosts HP price target, sees little effect from Xerox-ACS dealSeptember 30th, 2009 Analyst sees little effect on HP from Xerox dealNEW YORK — Kaufman Bros. analyst Shaw Wu doesn't think the combination of Xerox Corp.
Xerox to purchase Affiliated Computer Services in cash-and-stock deal valued at $5.75 billionSeptember 30th, 2009 Xerox to buy Affiliated Computer for $5.75BNEW YORK — Xerox Corp. has agreed to buy Affiliated Computer Services Inc.
US stocks rally on merger dealsSeptember 28th, 2009 NEW YORK - US stocks rallied Monday as investors take the merger-and-acquisition deals as a sign of economic recovery. Xerox said Monday it is buying the business processing company Affiliated Computer Services for about $6.4 billion in cash and stocks.
Printer sales up one percent last fiscalJuly 30th, 2009 NEW DELHI - Despite the economic slowdown, printer sales in India grew one percent to 1.61 million units last fiscal as compared to the year before, an IT hardware manufacturers' lobby said Thursday. "The total printer sales between April 2008 and March 2009, with dot-matrix, ink-jet and laser-jet printers taken together, were 1.61 million, registering a growth of one percent over the previous year," the Manufacturers Association for Information Technology (MAIT) said in a statement.
Xerox posts smaller 2nd-quarter profit but tops forecast with cost cuttingJuly 23rd, 2009 Xerox posts smaller 2Q profit, tops forecastNEW YORK — Xerox Corp. said Thursday its second-quarter profit tumbled 35 percent but topped Wall Street forecasts, as cost cutting helped offset another weak period for sales.
Xerox to report 2nd-quarter results Thursday as technology budgets remain tightJuly 21st, 2009 Earnings Preview: Xerox to report 2Q earningsNEW YORK — Xerox Corp. is set to report earnings for the second quarter on Thursday ahead of the opening bell.
With a new printer, Xerox looks to cut the cost _ and waste _ out of colorMay 9th, 2009 Xerox looks to make color printing more affordableNEW YORK — The economics of color printing in many big offices are simple: A page of black and white costs about 2 cents per page, while color runs about 8 cents. That's one reason why only 15 percent of the 2.25 trillion pages printed worldwide each year are in color.
Xerox posts 1st-quarter profit, results meet lowered outlook the company issued last monthApril 24th, 2009 Xerox 1Q earnings meet revised outlookNEW YORK — Xerox Corp. met lowered expectations for first-quarter earnings Friday, but said slower spending on printing equipment and supplies continued to hurt sales, a trend the company projected to continue for at least the next few months.
Xerox posts 1st-quarter profit, results meet lowered outlook the company issued last monthApril 24th, 2009 Xerox 1Q earnings meets revised outlookNEW YORK — Xerox posted a profit in the first quarter that met its revised guidance, which the company slashed last month due to restructuring costs and declining technology spending. The Norwalk, Conn.-based printer and copier maker said Friday that for the first quarter it earned $42 million, or 5 cents per share.
Personal computer sales dip 19 percent in Q3March 16th, 2009 NEW DELHI - Personal computer (PC) sales, including desktops and laptops, declined 19 percent in the October-December quarter as against the year-ago period, an industry lobby said Monday. 'The total PC sales between October and December 2008 were 1.4 million units, a decline of 19 percent over the corresponding period last fiscal,' the Manufacturer's Association for Information Technology (MAIT) said.
Loading ...