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Xerox to Acquire Affiliated Computer Services for $6.4 Billion

In a deal that industry analysts are pointing to as part of an industry shift in which large technology suppliers shift their focus to services, Xerox will purchase Affiliated Computer Services, an outsourcing services company, for $6.4 billion. Connecticut-headquartered Xerox says in a statement that the acquisition is a "game-changer" that will help the company benefit from stronger revenue and earnings growth. "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," says Ursula M. Burns, Xerox's CEO. The transaction is expected to close in the first quarter of 2010; Lynn Blodgett, ACS's president and CEO, is expected to remain with the combined company, overseeing business-processing outsourcing. The deal will make Xerox a $22 billion company, $17 billion of which Xerox says will become recurring revenue. The purchase comes on the heels of Dell's announcement last week that it would buy Perot Systems.

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