ACS, a Xerox Company, and a Top 20 Training Outsourcing Company , this week announced they will acquire human resources outsourcing company ExcellerateHRO (EHRO) from Hewlett Packard for $125 m. The deal brings an experienced contingent of resources and customer base to an already global HR Outsourcing leader in ACS.
Revenues and client data are most often not published by companies in this market. But my best estimates prior to the deal lead me to believe that ACS was the 4th largest HRO company, and EHRO was the 8th largest HRO services provider. After the deal is consummated, it appears ACS will become the second largest provider of HRO services behind Hewitt Associates.
But most important to us in the training market is that ACS will become the largest HRO service provider which competes in standalone Training business process outsourcing deals. Hewitt is not considered a large player in the stand alone Training Outsourcing market. Other big players in the stand alone training outsourcing market as well as leaders in HRO services are IBM Global Services and Accenture.
The deal clearly demonstrates Xerox’s commitment to the overall HRO and Training Outsourcing industry. You may remember that Xerox acquired ACS about 15 months ago bringing together HR outsourcing services, IT outsourcing services, Training outsourcing services, and document management services. It appears Xerox is working towards becoming a global juggernaut in end-to-end back office corporate services.
A common question asked when you hear of a large corporate acquisition is who wins from the deal? The buyer? The seller? Which company will come out the best? My first take is that the valuation was fair, so both sides of the deal should financially be satisfied.
But I think the real winners in this deal will be the customers of training and HR services, especially those of EHRO. It shows there is a strong belief by Xerox that bringing together all human capital services to improve efficiencies and reduce costs for buyside companies is a viable market. I believe that existing customers of EHRO will definitely benefit from the increased level of learning services ACS brings to them that weren’t available in the past.
I had the opportunity to speak with Richard Klingshirn, Executive Managing Director of ACS Learning Services to get his take on the deal. Richard was clear that their acquisition of EHRO “makes a strong statement regarding the ongoing commitment of ACS and Xerox to the overall HR Services business, of which ACS Learning Services is a part of”. He very much wants the market to know that as they continue to grow the overall HR Services business, “they believe their clients will benefit from the investments in technology, innovation, people and processes they are making across the entire HR Services business”.
And of course I always welcome your comments.
Related Links
/training-outsourcing/press-releases/acs-announces-agreement-to-purchase-excelleratehro.aspx
http://www.reinventinghr.com/
http://www.considerthesourceblog.com/consider_the_source/2010/05/acs-and-excelleratehro-implications-for-the-benefits-outsourcing-market.html
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