Xerox 2011 Annual Report Download - page 71

69Xerox 2011 Annual Report
In February 2009, we acquired ComDoc,Inc. for approximately $145 in
cash. ComDoc is one of the largest independent office technology dealers
in the U.S. and it expanded our coverage in Ohio, Pennsylvania, New York
and West Virginia.
Our Technology segment also acquired one additional business in both
2010 and 2009 for $21 and $18 in cash, respectively, as part of our
strategy of increasing our U.S. distribution network for small and midsize
businesses. Our Services segment acquired one additional business in
2010 for $12 in cash.
Summary – 2010 and 2009 Acquisitions
The operating results of the 2010 and 2009 acquisitions described above
were not material to our financial statements and were included within our
results from the respective acquisition dates. TMS and EHRO were included
within our Services segment, while the acquisition of IBS and ComDoc
were primarily included within our Technology segment. The purchase
prices were primarily allocated to intangible assets and goodwill based
on third-party valuations and management’s estimates. Refer to Note 8 –
Goodwill and Intangible Assets, Net for additional information. Excluding
ACS, our 2010 acquisitions contributed aggregate revenues from their
respective acquisition dates of approximately $318 and $140 to our 2011
and 2010 total revenues, respectively.
Contingent Consideration
In connection with certain acquisitions, we are obligated to make
contingent payments if specified contractual performance targets are
achieved. Contingent consideration obligations are recorded at their
respective fair value. As of December 31, 2011, the maximum aggregate
amount of outstanding contingent obligations to former owners of
acquired entities was approximately $42, of which $27 was accrued,
representing the estimated fair value of this obligation. We made
contingent payments of $2 and $8 in 2011 and 2010, respectively,
which are reflected within investing activities in the Consolidated
Statements of Cash Flows.
Affiliated Computer Services, Inc. (“ACS”)
In February 2010, we acquired ACS in a cash-and-stock transaction valued
at approximately $6.5 billion. Each outstanding share of ACS common
stock was converted into a combination of 4.935 shares of Xerox common
stock and $18.60 in cash. In addition, as of the acquisition date, we repaid
$1.7 billion of ACS’s debt and assumed an additional $0.6 billion of debt.
We also issued convertible preferred stock with a fair value of $349 and
stock options valued at $222 (Refer to Note 17 – Preferred Stock and
Note 18 – Shareholders’ Equity for additional information regarding the
issuance of preferred stock and stock options, respectively). ACS provides
business process outsourcing and information technology outsourcing
services and solutions to commercial and governmental clients worldwide.
The operating results of ACS are included in our Services segment from
February 6, 2010.
In April 2011, we acquired Unamic/HCNB.V., the largest privately
owned customer care provider in the Benelux region in Western Europe,
for approximately $55 net of cash acquired. Unamic/HCN’s focus on the
Dutch-speaking market expands our customer care capabilities in the
Netherlands, Belgium, Turkey and Suriname.
In February 2011, we acquired ConceptGroup,Ltd. for $41 net of cash
acquired. This acquisition expands our reach into the small and midsize
business market in the U.K. Concept Group has nine locations throughout
the U.K. and provides document imaging solutions and technical services
to more than 3,000 customers.
Our Technology segment also acquired seven additional businesses
in 2011 for a total of $21 in cash as part of our strategy of increasing
our U.S. distribution network primarily for small and midsize businesses.
Our Services segment acquired three additional businesses in 2011
for a total of $25 in cash, primarily related to software to support our
BPO service offerings.
2011 Summary
The operating results of the acquisitions described above are not material
to our financial statements and are included within our results from the
respective acquisition dates. Breakaway, Symcor, ESM and Unamic/
HCN are included within our Services segment, while the acquisitions of
MBM and Concept Group are included within our Technology segment.
The purchase prices for all acquisitions, except Symcor, were primarily
allocated to intangible assets and goodwill based on third-party valuation
and management’s estimates. Refer to Note 8 – Goodwill and Intangible
Assets, Net for additional information. The overall weighted-average life
of the identified amortizable intangible assets is 10 years, which is being
amortized using a weighted average straight-line methodology. Our 2011
acquisitions contributed aggregate revenues of approximately $177 to
our 2011 total revenues from their respective acquisition dates.
2010 and 2009 Acquisitions
In October 2010, we acquired TMSHealth,LLC(“TMS”), a U.S. based
teleservices company that provides customer care services to the
pharmaceutical, biotech and healthcare industries, for approximately
$48 in cash. TMS enables us to improve communications among
pharmaceutical companies, physicians, consumers and pharmacists. By
providing customer education, product sales and marketing and clinical
trial solutions, we augment the IT and BPO services we deliver to the
healthcare and pharmaceutical industries.
In July 2010, we acquired ExcellerateHRO,LLP(“EHRO”), a global benefits
administration and relocation services provider, for $125 net of cash
acquired. EHRO established us as one of the world’s largest pension plan
administrators and as a leading provider of outsourced health and welfare
and relocation services.
In January 2010, we acquired IrishBusinessSystemsLimited(“IBS”),
a managed print services provider, for approximately $29 net of cash
acquired. IBS expanded our reach into the small and midsize business
market in Ireland, where it is the largest independent supplier of digital
imaging and printing solutions.
Notes to the Consolidated
Financial Statements
(in millions, except per-share data and where otherwise noted)