Xerox to Sell Information Technology Outsourcing Business to Atos for $1.05 Billion
19 December 2014 - 10:58AM
Business Wire
Xerox (NYSE: XRX) today announced an agreement to sell its
Information Technology Outsourcing (ITO) business to Atos for $1.05
billion prior to closing adjustments, with additional consideration
of $50 million subject to the condition of certain assets at
closing. The transaction is subject to customary closing conditions
and regulatory approval and is expected to close in the first half
of 2015.
The transaction will enable new levels of strategic
collaboration in client situations and innovative solutions
leveraging Atos’ world-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 U.S. and more than 3,800 in
global delivery countries. 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 GAAP earnings per share from continuing operations
of $0.87 - $0.89 and full-year 2014 adjusted earnings per
share of $1.04 - $1.06. For Q4 2014, Xerox expects GAAP earnings
per share from continuing operations of $0.24 - $0.26 and
adjusted earnings per share of $0.28 - $0.30.
Additionally, Xerox 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 impacts
in 2015, including the timing of use of proceeds, Xerox is updating
guidance for full-year 2015 GAAP earnings per share from continuing
operations to $0.88 - $0.94 and full-year 2015 adjusted
earnings per share to $1.05 - $1.11. Xerox does not anticipate
earnings per share dilution beyond 2015.
Additional details will be provided during our Q4 2014 earnings
release and as the transaction is nearer to closing.
About Xerox
Xerox is a global business services, technology and
document management company helping
organizations transform the way they manage their
business processes and information. Headquartered in Norwalk,
Conn., we have more than 140,000 Xerox employees and do business in
more than 180 countries. Together, we provide
business process services, printing equipment, hardware
and software technology for managing information -- from data
to documents. Learn more at www.Xerox.com.
Non- GAAP Measures
This release refers to the following non-GAAP financial measures
- adjusted earnings per share - for the Q4 2014 and full-year 2014
and 2015 guidance that excludes the after-tax impact of
amortization of intangibles.
Forward Looking Statements
This release contains "forward-looking statements" as defined in
the Private Securities Litigation Reform Act of 1995. The words
“anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,”
“should” and similar expressions, as they relate to Xerox, are
intended to identify forward-looking statements. These statements
reflect management’s current beliefs, assumptions and expectations
and are subject to a number of factors that may cause actual
results to differ materially. These factors include but are not
limited to: changes in economic conditions, political conditions,
trade protection measures, licensing requirements and tax matters
in the United States and in the foreign countries in which we do
business; changes in foreign currency exchange rates; actions of
competitors; our ability to obtain adequate pricing for our
products and services and to maintain and improve cost efficiency
of operations, including savings from restructuring actions and the
relocation of our service delivery centers; the risk that
multi-year contracts with governmental entities could be terminated
prior to the end of the contract term; the risk in the hiring and
retention of qualified personnel; the risk that unexpected costs
will be incurred; the risk that subcontractors, software vendors
and utility and network providers will not perform in a timely,
quality manner; our ability to recover capital investments; the
risk that our Services business could be adversely affected if we
are unsuccessful in managing the start-up of new contracts;
development of new products and services; our ability to protect
our intellectual property rights; our ability to expand equipment
placements; the risk that individually identifiable information of
customers, clients and employees could be inadvertently disclosed
or disclosed as a result of a breach of our security; service
interruptions; interest rates, cost of borrowing and access to
credit markets; reliance on third parties, including
subcontractors, for manufacturing of products and provision of
services; our ability to drive the expanded use of color in
printing and copying; the outcome of litigation and regulatory
proceedings to which we may be a party; and other factors that are
set forth in the “Risk Factors” section, the “Legal Proceedings”
section, the “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” section and other sections of
our Quarterly Reports on Form 10-Q for the quarters ended March 31,
2014, June 30, 2014 and September 30, 2014 and our 2013 Annual
Report on Form 10-K filed with the U.S. Securities and Exchange
Commission. Xerox assumes no obligation to update any
forward-looking statements as a result of new information or future
events or developments, except as required by law.
Customer Contacts:
United States: +1-866-595-5455 France: +33 475601725 Germany: +39
43131951015 United Kingdom: +44 1202755000
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Xerox®, Xerox and Design® are trademarks of Xerox in the United
States and/or other countries.
Investor:XeroxJennifer Horsley,
+1-203-849-2656Jennifer.Horsley@Xerox.comorXeroxTroy Anderson,
+1-203-849-2672Troy.Anderson@Xerox.comorMedia:XeroxKaren
Arena, +1-203-849-5521Karen.Arena@xerox.comorXeroxCarl Langsenkamp,
+1-585-423-5782Carl.Langsenkamp@xerox.com
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