0:00:00 David Johnson, Host:
Y’know last week, I
guess, we were calling it a mega merger Monday. Lots of deals being done. But
one, eh—one of the biggest, certainly—one of the most intriguing was one that
was just right here at home: Affiliated Computer, ACS, selling out for, uh, six
billion dollars to Xerox. So, how does this look, uh, a week later? Lynn
Blodgett’s the CEO of ACS, an’ joins us right now.
It’s good to have
you with us.
00:00:25 Lynn R. Blodgett, President and CEO,
Affiliated Computer Systems, Inc.:
Good to be with you
too, David, thank you.
00:00:29 Johnson:
Lynn, the—I saw
you—I know you spent last week out talking to customers and talking, I’m sure,
to shareholders and, I know, talking to, to yeh—your third constituency, and
that is, all the employees of ACS around the country. What was the
message?
00:00:43 Blodgett:
Well, the message
is, that, uh, we believe this is a—an, uh, great, ah, opportunity, a great
development, a positive development for, for all three constituents. And, ah,
just tryin’ to—muh—most of the time was really just explaining the story,
helping people to understand, uh, the rationale and why this makes
sense.
00:01:02 Johnson:
The, the—uh,
for—leh—let’s start with the employees, because unlike some mergers, and I
think, ah, of Hewlett Packard and, and EBS, maybe, because Hewlett Packard was
already in the consulting services business pretty aggressively—we saw a lot of
layoffs there. So, the expectation is that Xerox is not heavily in your
business, and, nor are you heavily in your business, so—eh, am I right that
there’s not gonna be a lot of job layoffs?
00:01:26 Blodgett:
There, there is
not. I mean, the, the intention here is not a, a classic, y’know, combining of
two like companies and trying to, uh, y’know, do a lot of the ba—values through,
y’know, synergies of, ah, eliminating people for, eh—just inherent in
that. Ah, y’know, there are some things that’re—that are duplicate,
y’know, where you have to look at some of your public—y’know, the fact that,
well, you, yeh—instead of having two public companies, you now have one public
company, and so there’s little bit of replication there. And some— y’know, some
sort of practical things like that, which are important , and it’s dealing with
people and so on. But, but in terms of having a big, ah, y’know strategic plan
to, ah, eliminate a lot of people, that’s not part of it at all.
00:02:09 Johnson:
Yknow, ah, I, I, I,
I think I understand why Xerox thinks you’re attractive. The stock’s been
steady, it’s a steady income stream. We’ve seen EDS, and then Perot Systems, and
now you bought out, so I’m convinced that—y’know this is, this is the future. I
guess on the flipside is, why do you need Xerox?
00:02:27 Blodgett:
Well, that’s a
great question, that—Xerox is, uh—and the—there’re, fah—three key things that,
that Xerox brings to ACS. One is the ss—the scale, the size. Y’know, the world’s
getting, uh—the world’s getting bigger, in terms of competition. And you, you’ve
named, uh, yeah, what, what’s happened with EDS and HP, y’know? The combining
there, the combining of Dell and Perot, uh—ah, and of course, IBM is such a,
ahm, y’know, behemoth, ah, always has been, and—so, being part of a, y’know,
twenty-plus-billion-dollar company, ah, is, is helpful. Is, this—just—so just
the scale, we think, is helpful.
The second is, ah,
at—mm, mm—the—ah, that Xerox has, eh, one of the great brands of the world. And
ACS is a wonderful company. It’s well known in many parts of the United States.
And there are certain parts of the world where people know who we are, but
generally speaking, we’re not—y’know, we don’t spend a lotta money on marketing
and, and brand development, and, eh, we’ve made a lot of headway in the last
couple years, but nothing in, in comparison to a brand like Xerox. And so,
having a global brand, we think, is important. And tha—the reason, eh, for that
is that as we—as competition, y’know, continues to, to ah, strengthen and so on,
ah, y’know, compee—companies get bigger, and brands get bigger. Ah, we need to
be able to have, ah, essentially have permission, I—geh—geh—if you could think
of it that way, have permission to be able to go into major organizations around
the world. And ih—and we—when you have a strong brand name, it, it allows you to
do that. The—in heh—ah, also, accompanying that is the, the fact that Xerox has
a global account management structure. A, eh, a situation where they have about
their five hundred largest accounts around the globe—‘bout half of those in the
U.S., ‘bout half outside the U.S.—who have global account executives who are
assigned to do nothing but try to build the—what we call the wallet share within
that particular cant—account. And so, they’re always looking for, for new
things. So it’s not—they’re not the salespeople. These are people who are
working with the c-level executives and trying to just, eh, uncover
opportunities within major accounts. So it’s relatively, we think, relatively
easy to introduce our salespeople into that channel. And that, ah, suddenly
gives us, y’know, in, in the—ah, yeh—in Europe, for example, y’know, access to
the two hundred and fifty largest companies or, at least, Xerox’s two-hundred
fifty…
00:04:59 Johnson:
Mm-hmm.
00:04:59 Blodgett:
…largest clients
and, and be able to get in there and have those, ah, have those c-level
introductions. And we just think that’s gonna be a tremendous, uh, ah, uh,
y’know, open a lot of doors for us.
00:05:10 Johnson:
Yeh—you think this,
ah, th—th—there don’t appear to be any—to me, anyway, any logical conflicts.
Y’think this breezes through the Justice Department and is, and is an eely—easy
closing?
00:05:21 Blodgett:
Oh, I think, from
the, ah, Hart-Scott perspective, I, I don’t—eh, y’know, never say never, and—not
trying to make the government’s judgment for them, but, ah, ah, we don’t expect
there’ll be an issue with that.
00:05:34 Johnson:
Mm, all right. Lot
a’ happy shareholders and maybe reassured en—employees after that ACS deal. Lynn
Blodgett’s the CEO.
It’s good to have
you with us.
00:05:41 Blodgett:
Good to be with
you…
00:05:42 Johnson:
Th—…
00:05:42 Blodgett:
…thank
you.
00:05:44 Johnson:
…thanks. I’m David Johnson, News
Radio 1080, KRLD.
Forward-Looking
Statements
This document
contains "forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995. The words “anticipate,” “believe,” “estimate,”
“expect,” “intend,” “will,” “should” and similar expressions, as they relate to
us, are intended to identify forward-looking statements. These statements
reflect management’s current beliefs, assumptions and expectations and are
subject to a number of factors that may cause actual results to differ
materially. These factors include but are not limited to: the
unprecedented volatility in the global economy; the risk that the future
business operations of the Company will not be successful; the risk that we will
not realize all of the anticipated benefits from our transaction with Xerox; the
risk that customer retention and revenue expansion goals for the Xerox
transaction will not be met and that disruptions from the Xerox transaction will
harm relationships with customers, employees and suppliers; the risk that
unexpected costs will be incurred; the outcome of litigation (including with
respect to the Xerox transaction) and regulatory proceedings to which we may be
a party; actions of competitors; changes and developments affecting our
industry; quarterly or cyclical variations in financial results; development of
new products and services; interest rates and cost of borrowing; our ability to
protect our intellectual property rights; our ability to maintain and improve
cost efficiency of operations, including savings from restructuring actions;
changes in foreign currency exchange rates; changes in economic conditions,
political conditions, trade protection measures, licensing requirements and tax
matters in the foreign countries in which we do business; reliance on third
parties for manufacturing of products and provision of services; and other
factors that are set forth in the “Risk Factors” section, the “Legal
Proceedings” section, the “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” section and other sections of our 2009
Annual Report on Form 10-K and Xerox’s 2008 Annual Report on Form 10-K and
Quarterly Report on Form 10-Q for the quarters ended March 31, 2009 and June 30,
2009 filed with the Securities and Exchange Commission. The Company assumes no
obligation to update any forward-looking statements as a result of new
information or future events or developments, except as required by
law.
The proposed merger
transaction involving the Company and Xerox will be submitted to the respective
stockholders of the Company and Xerox for their consideration. In
connection with the proposed merger, the Company will file a joint proxy
statement with the SEC (which such joint proxy statement will form a prospectus
of a registration statement on Form S-4 that will be filed by Xerox with the
SEC). The Company and Xerox will each mail the joint proxy
statement/prospectus to its stockholders. The Company and Xerox urge investors and security
holders to read the joint proxy statement/prospectus regarding the proposed
transaction when it becomes available because it will contain important
information. You may obtain a free copy of the joint proxy
statement/prospectus, as well as other filings containing information about the
Company and Xerox, without charge, at the SEC’s Internet site
(http://www.sec.gov). Copies of the joint proxy statement/prospectus
and the filings with the SEC that will be incorporated by reference in the joint
proxy statement/prospectus can also be obtained, when available, without charge,
from the Company’s website, www.acs-inc.com, under the heading “Investor
Relations” and then under the heading “SEC Filings”. You may also
obtain these documents, without charge, from Xerox’s website, www.xerox.com,
under the tab “Investor Relations” and then under the heading “SEC
Filings”.
The Company, Xerox
and their respective directors, executive officers and certain other members of
management and employees may be deemed to be participants in the solicitation of
proxies from the respective stockholders of the Company and Xerox in favor of
the merger. Information regarding the persons who may, under the
rules of the SEC, be deemed participants in the solicitation of the respective
stockholders of the Company and Xerox in connection with the proposed merger
will be set forth in the joint proxy statement/prospectus when it is filed with
the SEC. You can find information about the Company’s executive
officers and directors in its definitive proxy statement filed with the SEC on
April 14, 2009. You can find information about Xerox’s executive
officers and directors in its definitive proxy statement filed with the SEC on
April 6, 2009. You can obtain free copies of these documents from the
Company and Xerox websites using the contact information
above.
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