dimanche 30 mai 2010

ACS Announces Definitive Agreement to Acquire ExcellerateHRO

On May 25, Affiliated Computer Services (ACS), a Xerox Company, announced a definitive agreement to acquire ExcellerateHRO (EHRO), a global benefits administration and relocation services provider. We expect to complete the purchase from Hewlett-Packard Company following the conclusion of customary closing conditions.

The purchase of EHRO establishes ACS as one of the world's largest pension administrators and solidifies our role as a leading provider of outsourced health and welfare and relocation services. Our human capital management solutions already cover the full spectrum of HR functions – serving 5.5 million employees and retirees in more than 80 countries worldwide, in over 20 different languages. EHRO has more than 1,800 human resources specialists serving clients in the U.S., Canada, Latin America, Europe, Africa and the Middle East.

This acquisition clearly demonstrates our commitment to investing in human resources services for the benefit of our clients. Coupled with our increasing investments in new products and services, it also broadens our customer base and strengthens our capabilities and consistency to an expanding sector.

The acquisition complements our $50 million investment in client-focused HR service innovations during the past 18 months and builds upon our ability to provide specific solutions to our clients' needs, particularly in the employee benefits sector, such as pensions and 401(k) plans. With the addition of EHRO, we now have greater access to new industries and markets, as well as the ability to introduce our proprietary technology platform and business processes to an expanding marketplace.

Expanded Relocation Services
Together with EHRO's strong domestic foundation in the relocation services business and ACS' robust international expatriate services, we will now have a solid delivery model to manage all aspects of global mobility solutions.

Background Information on the Acquisition

Why is ACS buying ExcellerateHRO?
This acquisition, the first related to ACS since Xerox acquired ACS in February, signals our long-term commitment to building a robust HR services business.

What will the new company be called?
ExcellerateHRO will be integrated into our existing Human Resource Services business, which consists of four segments: Human Resources Outsourcing, Total Benefits Outsourcing, Learning Services and Buck Consultants.

What is the timetable for the acquisition?
We expect the acquisition to close late this summer.

What is the price of the acquisition?
We have not disclosed financial details of the transaction.

How will the acquisition affect ACS' commitment to innovation?
The acquisition will accelerate and deliver an unprecedented level of product and service innovation for clients. ACS has invested $50 million in new products and services over the past 18-20 months; Xerox invests about $900 million each year in R&D. This acquisition, coupled with our increasing investments in new products and services, will help us invent the future of global HR services.

Is there any client overlap between the two companies?
Because ExcellerateHRO and ACS have been competitors, there is very minimal client overlap between the two companies.

What type of clients will ACS pursue once the acquisition closes?
The acquisition will provide us with the opportunity to grow by serving a larger variety of clients (both government and commercial) with a larger base of services. We'll be able to better serve the under-served middle market (2,000 to 8,000 full-time employees), while maintaining our service commitments to the large client market (more than 8,000 employees).

How do you define mid- and large markets?
We define the large market as greater than 8,000 employees served and the mid-market as 2,000-8,000 employees. Our Buck Consultants business targets the mid-market with a co-sourced benefits administration offering. Our Total Benefits Outsourcing (TBO) business targets the broad market (mid-market and large market) with an outsourced benefits administration offering. EHRO targets the broad market with both offerings. Going forward, our goal is to leverage the capability (clients and solutions) that EHRO brings to ACS into both our markets and offerings through TBO and Buck.

Will ExcellerateHRO clients experience any gaps in service or quality during the integration process?
ACS is committed to leveraging our extensive acquisition integration experience to ensure a seamless, uninterrupted delivery of services for EHRO clients.

How will ACS' employee relocation services business change after the acquisition?
Together with EHRO's strong domestic foundation in the relocation services business and ACS' robust international expatriate services, we will now have a solid delivery model to manage all aspects of global mobility solutions.

What will be ACS' global market share after the integration process is complete?
Based on annual revenue estimates, ACS will be one of the largest global benefits administration providers, encompassing health and welfare, pension and defined contribution services. We will also have a much larger share of the global employee relocation services market.

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