The story
Founded by Darwin Deason in 1988.1
Founding and early developments
Affiliated Computer Services, Inc. (ACS) was founded by Darwin Deason and Charles M. Young, both former MTech Communications executives, in 1988. Deason had served as CEO at MTech and decided to launch another data processing firm after a management buyout bid of him and other executives had lost to another bid in 1988. MTech was sold to EDS for $345 million and in the same year Deason, together with a part of the MTech executive team, launched ACS. Deason was chairman and CEO while Young became president and COO.
Deason's expansion strategy was strongly reliant on acquisitions, accounting for around 70% of early growth. Two key developments were the acquisition of OBS Companies, a service provider with 200 employees and an annual revenue of $25 million, and a contract for the digitization of the Los Angeles County food stamp program.
By 1990 the company had 1,300 employees that generated revenues of more than $120 million.
Initially created as a data services provider to the financial services industry, Deason led ACS's expansion into the communications, education, financial services, government, healthcare, insurance, manufacturing, retail, and travel and transportation industries.
Growth as a private company
In 1991 ACS sought to acquire BancPlus to enter the mortgage banking business but lost to another bid. The following year, the company acquired CIC/DISC, a New York based outsourcing business.
ACS expanded beyond banking BPO services when it signed a 10-year data processing outsourcing contract with Southland Corporation (7-Eleven).
Public listing and continued growth
In 1995 ACS became a public company and divested bank data processing. By FY 1996 ACS became the fourth-largest commercial outsource provider in the U.S. More recently, ACS was best known for its Transportation Solutions Group (TSG), which supported transportation services including electronic toll collection, management of cities’ parking systems, and photo traffic enforcement.
In 2003 the company sold their government solutions business to Lockheed Martin, focusing on BPO services to commercial clients.
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In 2005, ACS was offered a buyout from TPG and in 2007 from Deason and Cerberus Capital Management. Both offers were rejected.
In 2009, ACS ranked #401 on the FORTUNE 500 list and employed about 74,000 people around the world who served thousands of commercial and government clients.
In February 2010, following its acquisition by Xerox, ACS was replaced by Urban Outfitters on the Standard & Poor 500 Index.
Recent developments
On July 1, 2015, Xerox sold the IT Outsourcing business to Atos. Xerox indicated that ITO did not line up with its vision of integration of BPO (business process outsourcing) and the legacy document handling concerns. On July 29, 2016, the US District Court for the Southern District of New York dismissed the lawsuit pursued by Matthew Sciabacucchi. The lawsuit contended that some Xerox Corp directors and officers had abrogated their fiduciary duties in connection with the company's $6.4 billion acquisition of ACS in 2010.
On January 3, 2017, a company called Conduent was spun off as a divestiture from Xerox. The business scope of Conduent was generally understood to be essentially identical to that of the former Affiliated Computer Services (ACS).
In February 2020, initial efforts to demolish the company's former headquarters building in Dallas failed; the process of taking the solid concrete building apart ended up taking several days.
Acquisitions
Affiliated Computer Systems pursued a focused expansion strategy from early on. By the time it was listed on the NASDAQ, only six years after its inception, the company had already acquired 13 data processing companies. Throughout its history, ACS bought more than 50 businesses, the following is an overview of key acquisitions and joint-ventures:
1989: OBS Companies, an established data processing and service company
1992: CIC/DISC, a New York based outsourcing business
1994: Joint venture with Transfirst, an electronic benefits transfer (EBT) company
1995: Systems Group, based in Dallas and Atlanta (ACL acquired a 70% interest)
2005: Transportation Revenue division of Ascom
From Wikipedia’s article on Affiliated Computer Services, shared under CC BY-SA 4.0.4