Xerox is acquiring ACS for $ 6.4 billion at roughly 1X revenues. Only 30% in cash, rest in stock. So in some ways less risky than Dell’s acquisition of Perot announced last week for 1.6X revenues in cash.
In other ways, still risky because ACS services revenues are twice as big as Xerox’s and also diverse as they do more ITO and finance/hr BPO than Xerox.
My concern, as it was with the Perot acquisition, is it is at a time when the infrastructure outsourcing market is going through a massive disruption.
Outsourcers like ACS are having to adjust from $ 2 to 3 a gb a month in storage pricing to cloud computing levels of 15c. New Data Center containerization and other design innovations, cooling efficiencies, tax credits in more competitive locations are making most outsourcers' hosting and data center services look really old in the tooth. Companies are looking at why they have to sign multi-year deskside services when Best Buy’s Geek Squad sells such services by the visit.
Economics, Operations, Units of Provisioning, Length of customer relationship are all going through fairly significant redefinitions.