Xerox buying ACS - leading US backoffice for tollers

Xerox is buying ACS, the companies announced this morning. Both companies are listed public companies, and the buy is for $6.4b in stock and cash. ACS is involved in tolling through purchase of a business unit that came from Lockheed Martin in the 1990s.

ACS's tolls unit based in Germantown Maryland - down the road from TOLLROADSnews - is the United States' dominant back office services contractor, designing and operating customer accounts, manning customer service phone  lines, and handling violation processing for electronic toll collection.

They have the major contracts in the northeast, mid-Atlantic and California.

ACS' corporate head offices are in Dallas TX.

Xerox grew out of photocopy machines into printing to become one of the world's largest companies selling equipment for putting ink on paper. A few feet away we still have a huge old Xerox laser printer we used to have running for 30 hour stretches printing TOLL ROADS Newsletter.

Like a relic of an earlier age it gathers dust and often goes weeks between a minute or so of activity, always amazing us that it still works... wait, it seems to be a Hewlett Packard.

So much is now online!

ACS is very much the prototypical online services company, but its toll segment also has a front end and system integration capability for toll collection.

Game-changer for Xerox

Ursula Burns Xerox CEO is quoted in a statement: "By combining Xerox's strengths in document technology with ACS's expertise in managing and automating work processes, we're creating a new class of solution provider. A game-changer for Xerox, acquiring ACS helps us expand our business and benefit from stronger revenue and earnings growth."

For now Xerox is buying major cash flow from ACS toll services contracts. They are however vulnerable to competition when contracts come due for renewal.

Many of the procedures and and rates of remuneration for ACS were set back in the days when electronic tolling was a novelty. Now it is the norm and huge and many say ACS is unnecessarily high cost.

Banks, telephone companies and internet financial services entrepreneurs are nosing around, saying they can do what ACS does for tollers at a fraction of the cost.

Xerox have their head office in Norwalk CT, a suburb of New York City.

TOLLROADSnews 2009-09-28