For all the folks who are “drunk” on racism and have a million excuses why you can’t get ahead, there are people out there who look like us who are doing some big thangs. Case in point, Ursula Burns.
Xerox Inc. has agreed to pay $6.4 billion cash and stock for Affiliated Computer Services Inc., giving the copier giant an outsourcing and information-services company as corporate spending remains weak. Ursula Burns, who became Xerox’s chief executive July 1, called the deal “a game-changer” for her company, saying it “helps us expand our business and benefit from stronger revenue and earnings growth.” Its shares fell 5.1% pre-market to $8.56.
The deal will triple Xerox’s service revenue to an estimated $10 billion next year from 2008’s $3.5 billion. It will also give the combined company $22 billion of annual revenue, $17 billion of which is coming on a recurring basis.
The deal values ACS shares at $63.11 each, a 34% premium to Friday’s closing price and 55 cents below the stock’s all-time high set in February 2006. Holders would get $18.60 and 4.935 shares of Xerox for each ACS share. Xerox also will assume $2 billion of ACS debt and issue $300 million of convertible preferred stock.
Up to $400 million in synergies are projected to be realized in the first three years after the deal’s closing, slated for the first quarter.
Ursula Burns is someone to watch out for. We don’t know if this big acquisition will work out, but she is putting everyone “on notice,” she is not playing around.