Xerox To Spend $100M In 2017 To Acquire More Multi-Branded Resellers, Get Into Emerging Markets

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Xerox has set aside $100 million for mergers and acquisitions this year to convert more multi-branded dealers into Xerox-exclusive agents and gain a foothold in newer technologies.

The Norwalk, Conn.-based vendor said its Global Imaging Systems (GIS) business unit plans to continue buying independent, multi-branded resellers and converting them over to resellers focused exclusively on Xerox, according to Bill Osbourn, Xerox's chief financial officer.

These resellers typically only cost 1x their annual revenue, Osbourn said, and Xerox has historically enjoyed a very good return from these deals. Osbourn said the company will continue looking for opportunities to carry out multi-branded resellers acquisitions not only in the United States, but also internationally, in 2017 and beyond.

[RELATED: CRN Exclusive: New Xerox CEO Jeff Jacobson On The Managed Print Services Goldmine, Why A4 Is So Important To The Channel, And The Pursuit Of Larger Partners]

The company's GIS practice has enjoyed great success in the North American SMB channel and is looking to replicate that performance in Europe, according to Jeff Jacobson, Xerox's new CEO. Jacobson took over from Ursula Burns at the start of the year as the company completed the spinoff of its $6.7 billion business process services division, which was renamed Conduent.

"We have solid plans in place to capture opportunities in our strategic growth areas to change the trajectory of our company's top line and outperform the market over time," Jacobson told Wall Street analysts during the company's earnings call Tuesday.

Sales for the quarter ended Dec. 31 tumbled to $2.73 billion, down 7.5 percent from $2.95 billion the year prior. That fell short of Seeking Alpha expectations of $2.77 billion.

Net income from continuing operations plummeted to $181 million, or 17 cents per share, down 29 percent from $256 million, or 24 cents, the year prior. On a non-GAAP basis, earnings fell to $260 million, or 25 cents per share, down 8.8 percent from $285 million, or 27 cents per share, last year. This was in-line with Seeking Alpha's estimates.

For the full year 2016, Xerox's sales fell to $10.77 billion, down 6 percent from $11.47 billion the year prior. Net income sunk to $616 million, or 58 cents per share, down 27 percent from $848 million, or 77 cents per share, last year.

Xerox is also exploring acquisition opportunities beyond multi-brand dealers in areas such as workflow automation, software technologies. Osbourn cautioned, though, that Xerox will be forced to pay a higher multiple to carry out technology-centric deals. 

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