Xerox has set aside $100 million for acquisitions this year, company’s chairman Ursula Burns revealed in a conference call. The Connecticut-based technology giant will use this money for acquiring smaller firms in the outsourcing sector.
The announcement comes months after Xerox revealed plans to separate its BPO business from its core document technology unit. Its outsourcing unit is now called Conduent, which will be led by former Infosys executive Ashok Vemuri, whose appointment was announced in June this year.
“We have still $100 million in our plan for M&A–fairly modest plans for 2016,” Burns said in reply to a question during the conference call.
Acquiring new companies and increasing revenue will be the way forward for Xerox, Burns said, adding that the company has already spent $18 million on acquisitions this year. Burns did not reveal the name of the company Xerox acquired in the past seven months period.
“It is a business that has to acquire to fill out capabilities and to grow revenue, and that will continue to be the case as we move into the Conduent business,” Burns continued.
Xerox moved formally into the BPO business in 2010 when it acquired Affiliated Computer Services Inc. for $6 billion. Analysts thought its expertise in document technology would help it grow into a new class of BPO service provider. But Xerox has continued to struggle to maintain the momentum it gained through the takeover of ACS.
In 2014, it sold its IT outsourcing arm to Atos, saying it would like to focus on business process outsourcing. But the results continued to disappoint investors, with the company’s BPO revenue dropping 5% last year.