French IT services giant Atos has agreed to pay US$1.05 billion for the IT Outsourcing (ITO) division of the US-based Xerox.

Under the terms of the deal, which includes ownership of 18 data centers, Atos will become a primary IT provider to Xerox. The American company will instead focus on the business process and document outsourcing.

“This transaction is another step in our ongoing portfolio management strategy and increases our focus on those areas where we can deliver the most value and expertise to our clients,” said Ursula Burns, chairwoman and CEO of Xerox.

The deal is expected to close in the first half of 2015.

Shifting the weight
Xerox’s ITO business employs 9,800 staff across 45 countries, almost half of them based in the US. The company entered IT services market in 2010, with the purchase of Affiliated Computer Services for $6.4 billion.

Today, the ITO division alone is supporting 350,000 desktops, 28,000 servers and bringing in estimated 2014 revenues of $1.5 billion.

Next year, both the management and field staff will be transferred to Atos, and the company will receive all of Xerox’s existing ITO contracts. It will also take ownership of 18 data centers which support Xerox’s Managed IT offering, including facilities in Texas, New York and Minnesota.

Xerox already relies on Atos to run some of its ITO operations in Europe, so many customers won’t even notice the difference.

The deal will triple the presence of the European company in the US. “Increasing our position in the US is a major step in the completion of our three year strategic plan and responds to a strong demand from our global customers,” explained Thierry Breton, Chairman and CEO of Atos.

“This transaction will allow us to strengthen our footprint in the U.S. market which is an early adopter of high growth innovative technologies and to access a pool of talented and highly skilled technologists. At Atos we are all excited to welcome soon our 9,800 new colleagues who will be part of a leader fully dedicated to the most advanced IT Services.”