Xerox to Sell IT Outsourcing Business to Atos for $1.05 Billion
December 19, 2014 – Xerox reports that it’ll be selling its Information Technology Outsourcing (ITO) business to French technology company Atos for $1.05 billion, and expects the transaction to close in the first half of 2015.
The firm says the transaction will enable new levels of strategic collaboration in client situations and innovative solutions leveraging Atos’ class ITO capabilities and highlighting Xerox’s Business Process Outsourcing (BPO) and Document Outsourcing expertise.
Xerox’s ITO business includes approximately 9,800 ITO employees in 45 countries, with 4,500 in the United States and more than 3,800 globally. The Xerox ITO leadership team will join Atos. Xerox’s existing ITO clients will gain access to Atos’ global IT services capabilities and a broad range of services.
Also under the terms of this transaction, Atos will provide IT services to Xerox.
As a result of the pending sale of the ITO business, Xerox expects to report this business as a discontinued operation. For full-year 2014, this represents an estimated net $1.3 billion in third-party Services segment revenue and an estimated $115 million in Services segment profit. With this change, Xerox now expects full-year 2014 earnings per share of $0.87 – $0.89 and full-year 2014 adjusted earnings per share of $1.04 – $1.06. For fourth-quarter 2014, Xerox expects earnings per share of $0.24 – $0.26 and adjusted earnings per share of $0.28 – $0.30.
Xerox also expects initial net after-tax proceeds from the transaction of approximately $850 million, and plans to increase its 2015 capital allocation for repurchasing shares to approximately $1.0 billion and up to $900 million for acquisitions.
To reflect the pending sale of the ITO business and its impact in 2015, including the timing of use of proceeds, Xerox is updating guidance for full-year 2015 earnings per share from continuing operations to $0.88 – $0.94 and full-year 2015 adjusted earnings per share to $1.05 – $1.11.
November 2014: XEROX’S IMPIKA FOCUSING ON PRODUCT-SALES EXPANSION IN ASIA