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Xerox processes digital deal
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March 5, 1998: 11:59 a.m. ET
Copying king to buy XLConnect and parent Intelligent Electronics for $415M
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NEW YORK (CNNfn) - Hoping to copy its successes in traditional document processing in the New Information Age, Xerox Corp. agreed Thursday to acquire XLConnect Solutions and its parent company, Intelligent Electronics Inc., in a deal valued at $415 million.
XLConnect, (XLCT) based in the Philadelphia suburb of Exton, Penn., provides information technology services, including network management and outsourcing, that helps clients to enhance productivity by improving the flow of information among employees, customers and suppliers. In 1997, the company posted revenues of $135 million.
Xerox reported revenues of $18.2 billion last year.
Intelligent Electronics (INEL) performs similar services for mid-sized companies, government agencies and educational institutions.
Paul Allaire, Xerox's chairman and chief executive officer, said the quantum leaps and bounds in the computer networking industry had led to a "tremendous increase" in the volume of digital documents and new links between traditional document processing and imaging, voice and data technologies.
"This acquisition will infuse Xerox (XRX) with hundreds of talented and trained network specialists who will design and build publishing, workflow and other document solutions," Allaire said.
Under the all-cash agreement, Xerox will acquire Intelligent Electronics, which owns an 80 percent stake in XLConnect, as well as the remaining 20 percent of XLConnect shares that are publicly held.
Xerox will pay $20 a share for both XLConnect and Intelligent Electronics stock.
Xerox officials said the acquisition will have a neutral impact on earnings in 1998 and contribute to earnings thereafter.
Shares of Xerox slid 1-3/8 to 90-1/2 in mid-morning trading Thursday on the New York Stock Exchange, while XLConnect stock eased 3-1/8 to 19-3/8 on the Nasdaq. 
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