It seems that “exploring strategic alternatives to enhance shareholder value” is all the rage among document imaging vendors these days. In the wake of HP’s strategic split last year and Lexmark’s disclosure that it is assessing its options, Xerox has announced its own plans for a strategic separation. The company announced plans today to separate into two independent businesses, a process that should play out over most of 2016. One entity will comprise the company’s current Document Technology business, an operation valued at $11 billion. The company will spin off its $7 billion dollar Business Process Outsourcing business into a separate entity.
According to CEO Ursula Burns, the decision was made to drive shareholder value and make each company more streamlined and adaptable. “Today Xerox is taking further affirmative steps to drive shareholder value by announcing it will separate into two strong, independent, publicly traded companies,” said Burns in a press statement. “These two companies will be well positioned to lead in their respective rapidly evolving markets and capitalize on the opportunities that now exist to expand margins and increase market share.”
American business magnate and activist investor Carl C. Icahn, who has amassed more than 8 percent of Xerox’s shares, will reportedly be on the board of the BPO company. “We applaud Ursula Burns and Xerox’s board of Directors for recognizing the importance of separating Xerox into two publicly traded companies. We strongly believe that an independent BPO company with fresh, focused leadership and best-in-class corporate governance will greatly enhance shareholder value, and we are proud to be a part of that process.”
The names of two newly created companies, as well as more details on Ms. Burns role and other leadership positions, remains to be seen. But for Xerox’s document-imaging customers and channel partners, we expect it should be business as usual: MFP, printer, and production-print hardware and software will remain with the Document Technology group, with the BPO group owning assets related to enterprise-level document/data outsourcing services.
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