Xerox buys a company three times the size of CGI

I know what you guys are thinking: Mike, what the heck are you doing? Are you sitting on your hands watching a beautiful Canadian sunset wondering what could possibly please a CGI shareholder these days?

Xerox planning to buy ACS for $6.4B is yet another frenzy going on the market these days, it feels like the 90’s when everyone in the office was buying the same overpriced stock because they heard about it in the men’s room. What’s next, you ask, what hardware company will buy an IT integrator? Dewalt? John Deere? I’m hearing your thoughts, CGI is a prime target because it also has a 3-letter company name, it gets two third of its revenues from outsourcing deals, much of its money come from government clients, and so on.

Never fear, Roach is here. We’re executing our strategic plan, we won’t rush into ill-advised merger because it’s what analysts expects us to do.

Having said that, I wouldn’t want to be an ACS consultant coming into a project when the merger will be completed. Let’s picture the conversation:

Consultant: I’m John, I’m a consultant with Xerox.

Client: We’ve been expecting you John, the copier is having a paper jam every time we’re using the legal paper tray.

Consultant: No, you’re making a mistake, I’m not a copier repairman, I’m with Xerox and I do consulting services. We're a new company now. I was told to report here this morning on a managed services project.

Client: The copier also says the drum needs to be serviced, which I don’t understand because it was serviced 6 months ago. You’ll notice that the glass is cracked, we’ll pay for this because it’s Jennifer’s fault – we told her no to sit on the copier during the last party and…

Proof is, ACS expects to sell copiers. Money quote from ACS CEO Lynn Blodgett: “With this combination, our tool box just got a lot bigger”. Yes, Lynn your toolbox now includes screwdrivers, toner boxes and cleaning cloth. Welcome to the Document Company.