Jim, Latest news on Xerox/INEL/XLCT. Maybe its gonna really happen this time. Thanks for the invitation to examine this one. I got in and the water is fine.
Reuters Story - March 03, 1998 21:42
STAMFORD, Conn, March 3 (Reuters) - Buying XLConnect
Solutions Inc would give Xerox Corp a boost in
the fast-growing information-technology (IT) services field,
analysts said on Tuesday.
Stamford-based Xerox declined to comment on a published
report it might buy Exton, Pennsylvania-based XLConnect.
XLConnect is 80-percent owned by Intelligent Electronics
Inc .
Tuesday's Wall Street Journal quoted sources close to the
talks who said XLConnect might fetch as much as $420 million.
Analysts said XLConnect would be a good fit for Xerox, and
that it would probably be accretive to earnings beginning in
1999.
"The timing of it is perfect," said Alex Henderson, analyst
at Prudential Securities Inc.
Henderson said that the IT services industry is growing by
up to 40 percent a year in revenues, although he did not give
an overall figure.
"Xerox rolled out their digital products in 1997, and the
logical next step is to expand your services capability, for
integration and IT services," Henderson said.
Henderson said that services already account for about 80
percent of Xerox's profits, but that IT services require
different skills than Xerox's traditional strength in copiers.
"This is a logical next step in their expansion into IT
services into the digital arena," Henderson said.
Henderson noted that Xerox was moving aggressively from
analog to digital products, and that the company was having
success with integrated, multi-function products.
"We've been arguing for a couple of years now that the
company really needs to get more aggressive on the acquisition
front, and the IT services front," he said.
Analysts said XLConnect would complement Xerox's drive to
convert customers from stand-alone analog products to more
versatile digital ones, which can be hooked into customers'
office computer networks.
"What XL has are computer engineers who are very familiar
with networks and how to interact and integrate products onto
networks," said Jack Kelly, managing director at Goldman, Sachs
& Co.
"That is the strategic advantage of XL," Kelly said.
XLConnect has about 1,200 employees.
"The big trend is conversion (to digital)," Kelly said.
"This will clearly facilitate the conversion and keep Xerox in
the forefront of the digital printing business."
Xerox shares gained $0.8750 to close at $89.4375 on volume
of 900,300 shares.
XLConnect shares surged $4.50 to close at $21.75 on volume
of 2.05 million shares.
((--Matthew Lewis, Hartford newsroom, (860) 727-0224)) |
