Restructure at Xerox – split into two companies

Print Solutions

Xerox has announced a major restructure of its business, which will be the group split into two companies – The Document Technology company and The Business Process Outsourcing company.

The board unanimously approved management's plan to separate Xerox into two independent publicly traded companies.

‘Xerox is taking further affirmative steps to drive shareholder value by announcing it will eparate into two strong, independent, publicly traded companies,’ said Ursula Burns, chairman and chief executive officer of Xerox. ‘These two companies will be well positioned to lead in their respective rapidly evolving markets and capitalise on the opportunities that now exist to expand margins and increase market share.’

‘I am confident that the extensive structural review we conducted over the last few months has produced the right path forward for our company,’ she added. ‘We will now position the companies for success and execute our plan to separate them in the shortest possible timeframe while continuing to focus on achieving our 2016 goals.’

The Document Technology company will continue to be a global leader in document management and document outsourcing with approximately $11 billion in 2015 revenue.

The Business Process Outsourcing (BPO) company will help clients improve the flow of work by leveraging its expertise in managing transaction intensive processes and applying innovations to automate and simplify business processes. With approximately $7 billion in 2015 revenue – more than 90% of which is annuity based – the company is focused on attractive growth markets including transportation, healthcare, commercial and government services. As an independent company, BPO will have the focus and flexibility needed to continue to adapt to the changing needs of its clients, further refine its portfolio of services and pursue significant growth and margin expansion opportunities.

Each company will leverage its areas of strength and differentiation to address distinct market trends and opportunities. The Document Technology company will invest selectively in growth areas while ensuring continued operational discipline and capturing transformative productivity. The BPO company will focus on leadership in attractive market segments to deliver differentiated solutions to its clients and drive profitable revenue growth.

Xerox has also announced a three year strategic transformation programme targeting a cumulative $2.4 billion savings across all segments. The is inclusive of on-going activities and $600 million of incremental transformation initiatives. The company expects $700 million in annualised savings in 2016.

Xerox will begin the process to separate into the two companies while it finalises the transaction structure. The objective is to complete the separation by year end, subject to customary conditions, receipt of regulatory approvals, tax considerations, securing any necessary financing and final approval of the Xerox board.

Until the separation is complete, Xerox will continue to operate as a single company and it will continue to be business as usual for customers and employees.