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Business – Xerox to Buy Affiliated Computer for $6.4 Billion

Katie Hoffmann

Sept. 28 (Bloomberg) — Xerox Corp., the world’s largest maker of high-speed color printers, said it’s buying Affiliated Computer Services Inc. for $6.4 billion, extending its reach in the services market.

Xerox is paying $63.11 in cash and stock for each Affiliated Computer share, 33.6 percent more than the closing price on Sept. 25 of $47.25, the Norwalk, Connecticut-based company said in a statement.

With the purchase, Xerox will have revenue of $22 billion, of which $17 billion is recurring, Chief Executive Officer Ursula Burns said in the statement. Burns, who took over as chief executive officer July 1, had been trying to boost revenue as customers delay purchases during the recession.

“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,” Burns said in the statement.

Under the agreement, Xerox will pay Dallas-based Affiliated Computer $18.60 a share in cash and 4.935 shares. The deal will add to earning on an adjusted basis from the first year, Xerox said.

Xerox has been seeking to move into new markets to offset slumping sales during the recession. On Sept. 11, the company said it will start selling digital printers for packaging and labels. In May, Xerox introduced the first solid-ink color printer for large businesses, which melts bricks of ink to put color on paper. It cuts the cost of color printing by about 62 percent on average.

Xerox shares have risen 13 percent in New York Stock Exchange composite trading this year.

To contact the reporter on this story: Katie Hoffmann in New York at khoffmann4@bloomberg.net

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September 28, 2009 - Posted by | Uncategorized |

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