Xerox announced its acquisition of Affiliated Computer Services (ACS) on September 28, 2009, at a stated value of $6.4 billion, and completed the deal on February 8, 2010. The cash-and-stock transaction was intended to combine Xerox’s document technology and services with ACS’s business process outsourcing and IT services. The $6.4 billion figure was based on Xerox’s share price at the September 25, 2009 close; it was not the full list of transaction obligations.
When did Xerox announce and complete the ACS acquisition?
Xerox and ACS announced a definitive agreement on September 28, 2009. Xerox reported that the acquisition was completed on February 8, 2010. The announcement date and the closing date are distinct milestones: the first established the agreed transaction, while the second marked its completion.
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Xerox’s September 28, 2009 announcement described the proposed acquisition; its February 8, 2010 completion notice confirmed the close.
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How much did Xerox pay for ACS?
The companies announced a value of $63.11 per ACS share, or approximately $6.4 billion, using Xerox’s closing share price on September 25, 2009. The consideration was a combination of cash and Xerox shares, so the headline valuation depended in part on the reference price of Xerox stock.
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ACS’s filed transaction FAQ gave a fuller account of the obligations: $18.60 in cash and 4.935 Xerox shares for each ACS share, plus Xerox’s assumption of $2 billion of ACS debt and the issuance of $300 million in convertible preferred stock to the ACS Class B shareholder. These details should not be conflated with the $6.4 billion headline value, which was calculated from the stated per-share consideration at a specified stock price.
The companies’ announcement states the $63.11 per-share value and $6.4 billion headline figure. ACS’s filed FAQ describes the cash, stock, debt and preferred-stock terms.
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What did ACS do?
ACS provided business process outsourcing and IT services. Its work included data processing, human-resources benefits management, finance support and customer relationship management. In the 2009 joint proxy statement/prospectus, ACS said it supported client operations in more than 100 countries.
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Outbyte PC Repair FREEClear out junk files and repair common Windows errorsFree Scan →Outbyte Driver Updater FREEFix the driver behind crashes, sound loss and screen glitchesFind Drivers →Xerox’s completion notice describes ACS’s services, while the 2009 joint proxy statement/prospectus provides the company background and geographic reach.
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Why did Xerox buy ACS?
Xerox said the deal would pair its document technology and services with ACS’s ability to manage and automate work processes. The company presented the combination as a way to expand its business process management capabilities and grow its services business by drawing on Xerox’s brand and customer relationships. Those points explain Xerox’s stated strategic rationale; they do not, by themselves, establish that the anticipated benefits were later achieved.
At the time, Xerox CEO Ursula Burns called the acquisition “game-changing for our company and very good news for Xerox people as well as our customers and shareholders.” Burns made that statement in a September 28, 2009 letter to Xerox employees filed with the SEC; it reflects the company’s view when the deal was announced.
The announcement and Burns’s employee letter set out Xerox’s rationale and contemporaneous characterization.
Which financial figures were projections?
Xerox and ACS described the expected scale of the combined business in their 2009 announcement. These were forward-looking estimates, not current figures or proof of realized post-acquisition performance.
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| Figure | What it referred to | Qualification |
|---|---|---|
| $22 billion | Projected revenue for the combined company | Estimate made by Xerox and ACS in their 2009 announcement, not a reported later result. |
| $3.5 billion in 2008 to an estimated $10 billion in 2010 | Xerox services revenue | The 2010 figure was an estimate published in 2009, not a confirmed outcome. |
| $6.4 billion | Announced acquisition value | Based on Xerox’s September 25, 2009 closing share price. |
The companies’ announcement is the source for the transaction valuation and revenue estimates. Read the September 28, 2009 announcement.
What the deal figures do—and do not—tell you
The acquisition was a historical corporate transaction, not a consumer purchase or an investment offer. The announcement documents what Xerox and ACS agreed to and expected in 2009; the completion notice establishes that the deal closed in 2010. The cited materials do not establish the later corporate lineage or present-day ownership of the acquired operations, so the historical acquisition alone should not be used to infer their current status.
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