Xerox 2012 Annual Report Download - page 71

69Xerox 2012 Annual Report
Note 3 – Acquisitions
2012 Acquisitions
In July 2012, we acquired Wireless Data Services, Ltd. (“WDS”), a
provider of technical support, knowledge management and related
consulting to the world’s largest wireless telecommunication brands
for approximately $95 (£60 million) in cash. Based in the U.K., WDS’s
expertise in the telecommunications industry strengthens our broad
portfolio of customer care solutions.
In February 2012, we acquired R.K. Dixon, a leading provider of IT
services, copiers, printers and managed print services for approximately
$58 in cash. The acquisition furthers our coverage of central Illinois and
eastern Iowa, building on our strategy to create a nationwide network
of locally-based companies focused on customers’ needs to improve
performance through efficiencies.
Our Document Technology segment also acquired three additional
businesses in 2012 for a total of $62 in cash as part of our strategy of
increasing our U.S. distribution network primarily for small and mid-size
businesses. Our Services segment acquired four additional businesses in
2012 for a total of $61 in cash, primarily related to customer care and
software to support our BPO service offerings.
2012 Summary
All of our 2012 acquisitions reflected 100% ownership of the acquired
companies. 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. WDS is included within our
Services segment while the acquisition of R.K. Dixon is included within
our Document Technology segment. Our 2012 acquisitions contributed
aggregate revenues of approximately $162 to our 2012 total revenues
from their respective acquisition dates. The purchase prices for all
acquisitions were primarily allocated to intangible assets and goodwill
based on third-party valuations and management’s estimates.
The primary elements that generated the goodwill are the value of
synergies and the acquired assembled workforce. Approximately 50%
of the goodwill recorded in 2012 is expected to be deductible for tax
purposes. Refer to Note 9 – Goodwill and Intangible Assets, Net for
additional information.
The following table summarizes the purchase price allocations for our
2012 acquisitions as of the acquisition dates:
Weighted-Average Total 2012
Life (Years) Acquisitions
Accounts/finance receivables $ 51
Intangible assets:
Customer relationships 8 40
Trademarks 19 22
Non-compete agreements 4 5
Software 5 10
Goodwill 184
Other assets 29
Total Assets Acquired 341
Liabilities assumed (65)
Total Purchase Price $ 276
2011 and 2010 Acquisitions
In December 2011, we acquired the Merizon Group Inc. which operates
MBM, formerly known as Modern Business Machines, a Wisconsin-
based office products distributor for approximately $42 net of cash
acquired. The acquisition furthers our strategy of creating a nationwide
network of locally-based companies focused on improving document
workflow and office efficiency.
In November 2011, we acquired The Breakaway Group (“Breakaway”),
a cloud-based service provider that helps healthcare professionals
accelerate their adoption of an electronic medical records (“EMR”)
system, for approximately $18 net of cash acquired. We are also
obligated to pay the sellers up to an additional $25 if certain future
performance targets are achieved, of which $18 was recorded as of the
acquisition date representing the estimated fair value of this obligation
for a total acquisition fair value of $36. The Denver-based firm’s
technology allows caregivers to practice using an EMR system without
jeopardizing actual patient data. This acquisition adds to our offering
of services that help healthcare professionals use the EMR system for
clinical benefit.
In September 2011, we acquired the net assets related to the
U.S. operations of Symcor Inc. (“Symcor”). In connection with the
acquisition, we assumed and took over the operational responsibility