Affiliated Computer Services
An American information technology services and business process outsourcing company acquired by Xerox in 2010.
Last updated August 26, 2026
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Overview
Affiliated Computer Services, Inc. (ACS) was an American information technology services and business process outsourcing company headquartered in Dallas, Texas. Founded in 1988 by Darwin Deason and Charles M. Young, both former MTech Communications executives, the company began as a regional data-processing provider serving the financial-services sector. It subsequently broadened its customer base and service portfolio through acquisitions, outsourcing contracts, and expansion into communications, education, government, healthcare, insurance, manufacturing, retail, and transportation. ACS’s early growth depended heavily on acquisitions. Among its early transactions was the purchase of OBS Companies, a data-processing and services provider, followed by the acquisition of CIC/DISC in 1992. The company also won major outsourcing work, including a long-term data-processing contract with Southland Corporation, the operator associated with the 7-Eleven convenience-store chain. By 1990, ACS reported more than 1,300 employees and revenue exceeding $120 million. It later developed capabilities in electronic benefits transfer, payment and ATM networks, administrative processing, and other technology-enabled services. ACS became a public company in 1995 and continued to build a broad outsourcing platform. It divested its bank data-processing business around the time of its public listing and was described by the mid-1990s as one of the largest commercial outsourcing providers in the United States. Its Transportation Solutions Group became particularly associated with electronic toll collection, municipal parking-management systems, and photo-based traffic enforcement. ACS also operated a substantial off-site ATM network and became a major provider of technology and process services to commercial organizations, government agencies, and nonprofit institutions. The company pursued further strategic changes during the 2000s. In 2003, it sold its government-solutions business to Lockheed Martin and emphasized business-process outsourcing for commercial customers. Potential buyouts proposed by TPG in 2005 and by Deason and Cerberus Capital Management in 2007 were rejected. ACS nevertheless remained a large international services company, employing approximately 74,000 people by 2009, serving thousands of customers, and appearing on the Fortune 500. On September 28, 2009, Xerox announced an agreement to acquire ACS in a transaction valued at approximately $6.4 billion. Xerox sought to expand beyond document technology, printers, and related equipment by adding ACS’s information-technology outsourcing and business-process capabilities. The acquisition closed on February 8, 2010, ending ACS’s existence as an independent public company. Its operations were incorporated into Xerox’s services activities, and ACS was removed from the S&P 500 index soon afterward. The former ACS platform continued to influence Xerox’s services organization after the acquisition. Xerox sold its information-technology outsourcing business to Atos in 2015, stating that the activity no longer aligned with its preferred integration of business-process services and document-management operations. In 2017, Xerox spun off Conduent, whose operations were widely understood to encompass much of the business-process services platform associated with former ACS activities. ACS therefore survives primarily as a historical corporate identity and predecessor to later Xerox and Conduent services businesses rather than as an independent operating brand.
History
Affiliated Computer Services was established in 1988 by Darwin Deason and Charles M. Young after both had been associated with MTech Communications. Deason had previously served as MTech’s chief executive and pursued a management buyout before launching ACS with members of the former executive team. Deason became chairman and chief executive, while Young became president and chief operating officer. ACS initially concentrated on data processing for financial-services customers. Its expansion model relied substantially on acquisitions, allowing the company to add technical capabilities and customer relationships more rapidly than organic growth alone. The acquisition of OBS Companies in 1989 was an early milestone, and by 1990 the company had grown to approximately 1,300 employees with revenue above $120 million. ACS later acquired CIC/DISC, a New York outsourcing business, and entered additional service areas through electronic-benefits-transfer ventures and other transactions. The company expanded beyond banking and finance through contracts such as a ten-year data-processing outsourcing agreement with Southland Corporation. Its customer and industry coverage eventually included communications, education, government, healthcare, insurance, manufacturing, retail, and travel and transportation. ACS also developed an ATM network that became one of the largest non-bank networks in the United States and was described as the world’s largest at a later stage. ACS became publicly listed in 1995 and continued to grow through acquisitions and sector diversification. By fiscal 1996, it was regarded as the fourth-largest commercial outsourcing provider in the United States. Its Transportation Solutions Group became one of its best-known activities, providing electronic toll collection, parking-management systems, and photo traffic-enforcement technology. In 2003, ACS sold its government-solutions business to Lockheed Martin and placed greater emphasis on commercial business-process outsourcing. The company faced and rejected proposed buyout transactions from TPG in 2005 and from a group involving Deason and Cerberus Capital Management in 2007. In 2006, ACS disclosed issues involving the backdating of stock-option grants and reported an informal SEC investigation. The episode led to the resignation of CEO Mark King and CFO Warren Edwards; former CEO Jeff Rich had retired earlier that year. By 2009, ACS employed approximately 74,000 people, operated in nearly 100 countries, and served commercial, government, and nonprofit customers. Xerox announced its planned acquisition on September 28, 2009, in a transaction valued at approximately $6.4 billion. The deal closed on February 8, 2010. Xerox integrated ACS into its services organization, using the acquisition to increase its exposure to IT outsourcing and business-process services while reducing its historical dependence on document hardware and printing-related activities. The ACS identity did not continue as an independent company. Xerox later sold its IT outsourcing business to Atos in 2015 and spun off Conduent in 2017. Conduent’s business scope was broadly associated with the former ACS platform, particularly business-process services. In 2020, attempts were made to dismantle ACS’s former Dallas headquarters building, a physical reminder of the company’s pre-acquisition history.
- 2017
Conduent spin-off
[1]Xerox spins off Conduent, carrying forward a services platform substantially related to former ACS activities.
- 2015
IT outsourcing business sold to Atos
[1]Xerox sells its IT outsourcing business to Atos.
- 2010
Acquisition by Xerox completed
[2]Xerox closes the acquisition, ending ACS’s independent listed-company existence.
- 2009
Xerox announces acquisition plan
[1]Xerox announces a proposed acquisition of ACS valued at approximately $6.4 billion.
- 2006
Stock-option investigation disclosed
[1]ACS discloses an SEC investigation and improper backdating of certain stock-option grants.
- 2003
Government-solutions business sold
[1]ACS sells its government-solutions business to Lockheed Martin and concentrates more heavily on commercial outsourcing.
- 1995
Public listing
[1]ACS becomes a public company and divests its bank data-processing business.
- 1992
Acquisition of CIC/DISC
[1]ACS purchases the New York-based outsourcing business CIC/DISC.
- 1989
Acquisition of OBS Companies
[1]ACS acquires OBS Companies, adding an established data-processing and services operation.
- 1988
ACS is founded
[1]Darwin Deason and Charles M. Young establish Affiliated Computer Services in the United States.
Products and positioning
A technology-enabled outsourcing and business-services provider for businesses, government agencies, and nonprofit organizations.
IT services
Information technology services
ACS provided technology infrastructure, systems support, data processing, and related operational services for commercial and public-sector customers. These capabilities originated in its early financial-services work and later supported a much broader outsourcing portfolio.
Business services
Business process outsourcing
Business process outsourcing became ACS’s central growth platform. The company managed selected administrative, transactional, and back-office processes for businesses, government agencies, and nonprofit organizations, combining process personnel with technology and workflow systems.
Transportation technology
Transportation Solutions Group
ACS’s Transportation Solutions Group supported electronic toll collection, municipal parking-management systems, and photo traffic-enforcement programs. These services connected public-sector transportation operations with payment processing, data systems, and customer administration.
Financial technology services
ATM and electronic payment services
ACS operated off-site ATMs and developed a large non-bank ATM network during the 1990s. It also participated in electronic benefits transfer and related payment-processing activities, extending the company’s original financial-services expertise.
Industry-specific outsourcing
Healthcare and industry solutions
ACS applied its IT and process-management capabilities to healthcare and other specialized industries. The offering was not a single consumer product but a set of technology-enabled administrative and operational services tailored to sector-specific customers.
Controversies
2006
Stock-option backdating investigation
The SEC conducted an informal investigation into certain ACS stock-option grants. ACS stated that executives had selected favorable historical dates during periods when the company’s share price was lower, increasing the value of the options. CEO Mark King and CFO Warren Edwards resigned, while former CEO Jeff Rich had retired earlier in the year.
Brand decisions
2017
Conduent spin-offStrategyBackground
Xerox reorganized its services operations and sought to separate business-process services from its remaining document-technology activities.
Action taken
Xerox spun off Conduent as an independent company.
Aftermath
Conduent inherited a services scope broadly associated with the former ACS business, particularly business-process outsourcing.
2015
Sale of IT outsourcing business to AtosM&ABackground
Xerox reassessed the relationship between IT outsourcing, business-process outsourcing, and its legacy document-management activities.
Action taken
Xerox sold its IT outsourcing business to Atos.
Aftermath
The transaction separated part of the former ACS-related technology-services platform from Xerox.
2010
Xerox acquires ACSM&ABackground
Xerox wanted to expand beyond document technology and printing equipment into information-technology outsourcing and business-process services.
Action taken
Xerox completed its acquisition of ACS on February 8, 2010.
Aftermath
ACS ceased to exist as an independent listed company and its operations were integrated into Xerox’s services organization.
Transaction value. Approximately $6.4 billion (Announced September 28, 2009; completed February 8, 2010)
2003
Exit from government-solutions businessStrategyBackground
ACS sought to focus more strongly on commercial business-process outsourcing after developing a diversified portfolio of technology and government services.
Action taken
ACS sold its government-solutions business to Lockheed Martin.
Aftermath
The divestiture narrowed ACS’s government exposure and reinforced its emphasis on commercial outsourcing services.
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