ACS announced today that it has signed a definitive agreement to acquire the human resources consulting and outsourcing businesses of Mellon Financial Corporation for approximately $445 million. For the year ended December 31, 2004, the HR Business recorded revenues of approximately $660 million. The transaction is scheduled to close by the end of the fourth quarter of ACS' fiscal year 2005 (Apr-Jun 2005).
Mellon Financial yesterday said it has agreed to sell its human resources consulting and outsourcing businesses to Affiliated Computer Services for $445 million in cash. The deal is scheduled to close by the end of the second quarter, subject to regulatory approval. Gerard Cassidy, an analyst at RBC Capital Markets, said the price was lower than he expected. "We were thinking from the combination of historical transaction prices of these types of companies that the price was going to be closer to $500 million, and it came in obviously below that. It points to the fact that the business was wounded, hurt, and Mellon was unable to receive top dollar for this business."
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For the record, this sale closed in May 2005.
Disclosure: my wife owns a small number of ACS shares due to her previous participation in an ESPP while employed there.
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