In a major announcement made on Dec 18th, Atos would acquire Xerox’s ITO business to nearly triple its size in the U.S., which would represent its largest operating geography; Atos would become one of Xerox’s primary IT services providers. The transaction would enable Xerox to increase its focus on its BPO and document outsourcing businesses within its Services segment.
As part of this transaction, Atos will add Xerox’s blue-chip ITO clients to its portfolio in order to accompany them on their digital journey. With estimated 2014 revenue of $1.5 billion, Xerox’s ITO business employs approximately 9,800 ITO employees in 45 countries, with 4,500 in the U.S. and more than 3,800 in global delivery countries such as India, the Philippines and Mexico. The Xerox ITO leadership team will also join Atos. Xerox’s existing ITO clients will gain access to Atos’ global IT services capabilities and a broad range of cutting-edge services.
Acquiring Xerox’s ITO business provides Atos with a broader geographic footprint and the ability to support the needs of its European and U.S. clients anywhere in the world. This adds breadth to its already deep services portfolio and leading technologies, particularly in Cloud, Big Data, Cyber-security, and in High Power Computing.
Thierry Breton, Chairman and CEO of Atos, said: “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. This intended transaction would 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. At Atos we are all excited to welcome soon our 9,800 new colleagues who would be part of a leader fully dedicated to the most advanced IT Services.
“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 Ursula Burns, Xerox’s chairman and CEO. “This transaction aligns with our ongoing portfolio management strategy and increases our focus on those areas where we can deliver the most value and expertise to our clients”.
This certainly is going to be a game changer, Atos is going to leverage the market presence of Xerox, this will put the company as large market player in outsourcing and other IT segments. This acquisition will have significant impact in the Human Capital Management space, Xerox is already key market player post acquisition of Affiliated Computer Services in 2010.
In early Dec, Xerox expanded its Learning Portfolio with Intrepid Learning Solutions Acquisition.
Atos will bring in expertise in Consulting & Systems Integration services, Managed Services & BPO, Cloud operations, Big Data & Cyber-security solutions which can be leveraged to further expand the new dynamics of HRO Services. Atos presence in European market will help Xerox build a strong market for its services.
This is a win win situation for both the organization and with change in market conditions, it certainly can be very well thought strategic move.