Xerox To Acquire ACS for $6.4 Billion

Norwalk, Conn.-based Xerox Corporation announced on Monday that it plans to acquired ACS, a Dallas-based business process outsourcing (BPO) firm, in a cash and stock transaction valued at $6.4 billion.

Xerox says that it intends to leverage the acquisition of ACS to establish itself as a global leader in the document and business process management space and accelerate growth, according to a press release. ACS's expertise is in managing paper-based work processes providing specialized BPO and information technology services for industries that range from telecommunications, retail and financial services to healthcare, education and transportation, Xerox says.

"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," Ursula M. Burns, Xerox chief executive officer, said in the release. "A game-changer for Xerox, acquiring ACS helps us expand our business and benefit from stronger revenue and earnings growth."

Matt Josefowicz, director of Novarica's insurance practice, says that there has been a recent acceleration of combination hardware and services firms targeting enterprise customers, pointing out recent deals between HP and EDS as well as Dell and Perot Systems. "Can Xerox really transform itself into a services company from the hardware/consumables combo that they've been? ACS has a strong position in insurance application and infrastructure outsourcing, it will be interesting to see if they can combine that with Xerox's document and output expertise to really own that part of the market," Josefowicz says.