Xerox is selling its IT outsourcing business to France-based IT services company Atos for US$1.05 billion, the companies said late Thursday. Xerox said the move would allow it to focus on its business process and document outsourcing businesses within its services operations.
Xerox's IT outsourcing business generated about US$1.5 billion in revenue in 2014. Atos said the acquisition would nearly triple the size of its operations in the US. Under the deal, Atos will become a primary IT services provider for Xerox and will take on Xerox's IT outsourcing customers.
The boards of both companies have approved the deal, which is still subject to regulatory and antitrust approvals and other closing conditions. They expect to complete the sale sometime in the first half of 2015.
"Atos is a company with whom we've had a long relationship in several capacities. Selling the ITO business to Atos gives our clients around the globe an expanded, world-class suite of IT capabilities that complement Xerox's industry-leading BPO and document outsourcing solutions," said Xerox CEO Ursula Burns in a statement. "This transaction is another step in our ongoing portfolio management strategy and increases our focus on those areas where we can deliver the most value and expertise to our clients."
Xerox's IT outsourcing business employs about 9,800 in 45 countries, including about 4,500 in the US. They will move over to Atos, as will the Xerox IT outsourcing leadership team.
According to the Atos web site, Atos Australia has offices in Melbourne, Sydney and Perth.
"Increasing our position in the US is a major step in the completion of our three-year strategic plan and responds to a strong demand from our global customers," said Thierry Breton, Atos CEO, in a statement. "This transaction will allow us to strengthen our footprint in the US market, which is an early adopter of high-growth innovative technologies and to access a pool of talented and highly skilled technologists."
Atos, based in Bezons, France, has annual sales of approximately 10 billion Euros (approximately US$12.3 billion).
Xerox and Atos already have a working relationship. Xerox currently provides Atos with managed print, human resources management and financial services. And Xerox relies on Atos for IT outsourcing work in Europe.