Xerox announced this morning it will acquire Affiliated Computer Services for $6.4 billion — another huge deal for the IT Services space. We commented on the lure of IT Services acquisitions in our blog last week, and specifically named ACS as a likely target for acquisition by a ”product-focused” company.
The ACS acquisition marks the third of the top 10 outsourcers to be acquired in the last 16 months (ACS by Xerox today, Perot by Dell last week and EDS by HP in 2008). Recurring revenue continues to be extremely attractive to buyers that want to secure/stabilize their business models, especially in a down market. These buyers are most likely tempted by the stickiness of solutions/services client relationships to hopefully help pull through other products and offerings.
