Atos announced yesterday that they’ve agreed to buy Xerox’s IT outsourcing unit for $1.05 billion, which was well received by the markets spurring Atos’ shares to jump up to 9.3%. The acquisition will be a cash deal, with Xerox potentially getting an additional $50 million depending on the condition of certain assets upon completion of the transaction. Xerox’s CEO Ursula Burns and her team decided to divest the unit in order to re-focus on higher-margin business services and offset the decline of document printing.
The move is very much in-line with Atos’ strategy spearheaded by their CEO Thierry Breton to expand the geographic reach of Atos and particularly in the US where the acquisition will enable them to triple their size there. The shift to cloud computing is also a big focus of the french IT giant of which IT outsourcing plays a big role and should complement nicely their cybersecurity arm Bull, which Atos successfully acquired earlier this year.
With the acquisition, Atos will be taking on a business with approximately $1.5 in sales and 9,800 employees across 45 countries, of which 4,500 are based in the US and 3,800 in emerging markets such as India, the Philippines, and Mexico.