Xerox Acquires Outsourcing Firm Affiliated Computer Services (ACS) For $5.5 Billion
Xerox Corporation (NYSE:XRX) is getting into the IT consulting market by acquiring Affiliated Computer Services Inc. (NYSE:ACS) for $5.5 billion. The deal was made in cash and stock. This was one of the first major moves made by Ursula Burns, the current CEO of Xerox. This move is in direct competition with Dell’s recent acquisition of Perot Systems and HP’s acquisition of EDS.
After the acquisition was announced, Xerox’s shares fell 14.48% to $7.68. Xerox bought Global Imaging Services (GIS) for $1.5 billion in April 2007. Xerox has been able to efficiently integrate both companies together since then. So it is surprising that the stock price dropped.
Xerox has about $1 billion in cash and said that $3 billion of the deal will be financed through capital markets. If the deal ends up being terminated by Xerox, then ACS will be compensated $235 million. If ACS terminates the deal, Xerox will be paid $194 million.This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at +AmitChowdhry