Xerox to sell ITO arm to French IT services company Atos for $1.05 bn

US digital printing equipment maker Xerox Corp yesterday struck a deal to sell its information technology outsourcing arm to French IT services company Atos SE for $1.05 billion.

''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.

The deal will nearly triple its Atos' size in the US - its largest operating area, and would become one of Xerox's primary IT services provider.

With estimated 2014 revenue of $1.5 billion, Xerox's ITO business employs approximately 9,800 people in 45 countries, with 4,500 in the US and more than 3,800 in global delivery countries such as India, the Philippines and Mexico.

It generated $376 million in the quarter ended 30 September.

The Xerox ITO leadership team will join Atos and Xerox's existing ITO clients will have access to Atos' global IT services. Also under the terms of the deal, Atos will provide IT services to Xerox.

Xerox, best known for making printers and copiers, has been focusing on faster-growing divisions like business process outsourcing (BPO) and document outsourcing to offset a drop in printer sales.

Xerox''s ITO unit became part of the company through its 2009 acquisition of ACS.

Atos already has had a working relationship with Xerox for several years. Atos has relied on Xerox for managed print, human resource and financial services, while Xerox currently uses Atos for ITO work in Europe.

Acquiring Xerox's ITO business provides Atos with a broader geographic footprint and the ability to support the needs of its European and US clients anywhere in the world and adds breadth to it in Cloud, Big Data, Cyber-security, and in High Power Computing.

''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 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,'' said, Thierry Breton, chairman and CEO of Atos.

Formed in 2011 through the merger between Atos Origin and Siemens IT Solutions and Services GmbH, Atos is the European leader in IT service with 2013 revenue of €10 billion and 86,000 employees in 66 countries.