Xerox to buy Affiliated Computer Services

Xerox has announced plans to acquire Affiliated Computer Services (ACS) in a deal that the company has described as a "game changer" for the business.

The US$6.4bn (£4.02bn) deal will help Xerox cement its position in the growing business process outsourcing space, in which ACS is a major player.

ACS specialises in managing paper-based work processes and providing IT and business process outsourcing services to companies in a wide range of industries. Xerox believes the firm is a good fit because it will allow Xerox to expand the services it offers.

The purchase will also hasten Xerox's move towards being a provider of services as opposed to just hardware, and will boost revenues and save money, the firm said.

"By combining Xerox's strengths in document technology with ACS' expertise in managing and automating work processes, we are creating a new class of solution provider," said Xerox chief executive Ursula Burns. "A game changer for Xerox, acquiring ACS helps expand our business and benefit from stronger revenue and earnings growth."

Lynn Blodgett, president and chief executive at ACS, added: "We know that for ACS to expand globally and differentiate our offerings through technology, we need a partner with tremendous brand strength and leading innovation. Xerox offers that and more to bring our business to the next level while strengthening theirs."

The transaction is expected to close in the first quarter of 2010. ACS will remain an independent organisation, but its name will be tweaked to ACS, a Xerox Company.