Printer and copier giants Xerox Corp has decided to sell its Information Technology Outsourcing arm to the French firm Atos SE. In a press release on 18 January, Xerox stated that an agreement has been reached with Atos, whereby Atos will now be a primary IT service provider of Xerox. Atos has further confirmed on their website that the deal will close by the second quarter of 2015, thereby tripling their size in US, and a 10% increase in their earnings per share in the first year itself.
Xerox, in its press release, divulged that the deal is worth $1.05 billion, with additional consideration of $50 million. According to the company, the decision to let go of its ITO business was spurred by lower returns in the last quarter and also its slow pace of growth. This will now enable Xerox to focus more on its faster-growing Business Process Outsourcing and Document Outsourcing operations, Robert Zapfel, President of Xerox services business said. As part of the transaction, Atos will retain Xerox’s blue-chip ITO clientele. As of 2014, Xerox’s ITO business employs approximately 9,800 ITO employees in 45 countries, 4,500 of them in US. They will now join ranks of Atos, along with Xerox’s existing ITO leadership. This acquisition will help Atos in creating a greater impact and client base around the globe, especially in Europe and North America. This will also enhance its portfolio, particularly in Cloud, Big Data, Cyber-security, and in High Power Computing.
The takeover has received unanimous support from the Board of Directors of both the organisations, and therefore it has been a smooth sail for both Atos and Xerox. Thierry Breton, Chairman and CEO of Atos, said: “Increasing our position in the U.S. is a major step in the completion of our three year strategic plan and responds to a strong demand from our global customers. This intended transaction would allow us to strengthen our footprint in the US market which is an early adopter of high growth innovative technologies and to access a pool of talented and highly skilled technologists.” Ursula Burns, Xerox’s Chairperson and CEO added: “Atos is a company with whom we’ve had a long relationship in several capacities. Selling the ITO business to Atos gives our clients around the globe an expanded, world-class suite of IT capabilities that complement Xerox’s industry leading BPO and document outsourcing solutions.”
This mutually beneficial transaction will now allow both corporations to further their pursuit for excellence.