Xerox Seeks to Sell Financing Unit; Contracts with HCL for Outsourcing
As part of a presentation included with its 8K Form filed this month with the U.S. Securities and Exchange Commission, Xerox stated that it’s exploring the possibility of a “strategic transaction” involving its customer-financing business, which is said to account for more than 65 percent of its overall debt.
Xerox’s total debt is $5.2 billion, with the customer-financing business unit, which lends money to customers that lease its printers and copiers, making up $3.4 billion of that debt. Last year, the unit brought in $300 million of Xerox’s total $7.63 billion in revenue, or about 4 percent.
The move comes on Xerox’s recent announcement that it would form a new holding company that would own Xerox as a wholly owned subsidiary. Such a move is said to make it easier for Xerox to sell off parts of the company.
The firm is said to have first considered selling its financing unit, last July.
Xerox also reported that, this month, it had entered into a shared services agreement with HCL Technologies, under which it will seek to outsource certain global administrative and support functions, including select IT and finance functions (excluding accounting).
Xerox said that it expects the shared services arrangement with HCL to result in savings of approximately $90 million in 2019, and approximately $120 million in thereafter.
In total, Xerox says it will achieve total savings of $640 million in 2019, and total savings of $1.51 billion by 2021.
Dealer Acquisitions for Xerox Business Solutions
In its presentation, Xerox stated that it will seek to further expand its Xerox-brand multi-brand dealer channel via dealer acquisitions. It will also seek to broaden its coverage and invest in growing sales through IT resellers, as well as invest in and improve its ecommerce platforms.