Xerox adds to health IT portfolio with $6.4B ACS buy
The Dallas-based ACS has experience in managing paper-based work processes and providing specialized business process outsourcing and IT services for industries that include healthcare and telecommunications. Through its multi-year contracts with more than 1,700 federal, state, county and local governments, ACS is the largest U.S. provider of managed services to government entities, according to the companies.
The transaction, which has been approved by the Xerox and ACS boards of directors and an ACS special committee, is expected to close in the first quarter of 2010. Under the terms of the agreement, ACS shareholders will receive $18.60 per share in cash plus 4.935 Xerox shares for each ACS share they own. In addition, Xerox will assume ACS' debt of $2 billion and issue $300 million of convertible preferred stock to ACS's Class B shareholders.
In addition to gaining ACS’ client base, the Norwalk, Conn.-based Xerox said it will integrate its intellectual property with ACS’ services to create new solutions for end-to-end support of customers' work processes.
After the transaction closes, ACS will operate as an independent organization and initially will be branded ACS, a Xerox company. It will be led by current ACS president and CEO Lynn Blodgett, who will report to Xerox CEO Ursula Burns.
The acquisition is subject to customary closing conditions, including the receipt of domestic and foreign regulatory approvals and the approval of ACS and Xerox stockholders.