In a major step geared towards growing its IT services portfolio, Xerox Holdings Corp has signed a $400, 000, 000 deal to acquire ITsavvy; an IT services provider based in Oak Brook. This proposed acquisition expected to be completed by the year end demonstrates another key feature of Xerox progression to achieving the business’s strategic goals of diverse revenue sources to the enterprise that also increases it’s IT services business.

The transaction which will be subjected to merger control will include $180 million in cash and secured and promissory notes of $ 220 million. ITsavvy, now in the portfolio of New York based private equity firm GenNx360 Capital Partners, has similar IT capability portfolio to complement the Xerox portfolio that is expected to spur growth further in important markets globally such as the United States, Canada and the United Kingdom.

The acquisition and its relevance to Xerox’s strategic transformation plan were underscored by John Bruno, the firm’s president, and COO. “As part of our Reinvention, we have created a greater organizational focus on our emerging IT Services capabilities to diversify our revenue streams in the geographies we serve,” Bruno stated. He highlighted that ITsavvy’s offerings, combined with Xerox’s strong reputation, are expected to create new avenues for helping existing and new clients transform their work processes.

This decision arrives at a pivotal moment for Xerox as the company looks for ways to transform its business focused on office technologies and services. Originating from the background of supplying printing and copying solutions, the company has been trying strategically to diversify its service offerings to meet new competition challenges. This appears to be a major milestone in that direction, though the acquisition of IT skills could help Xerox offer a broader range of IT solutions to its clients.

The IT services market itself has been expanding at an impressive rate primarily because of the advances in the need for digital services across industries as well as the sophistication of business technology demands and needs. Thus, when IT savvy is achieved, Xerox is well placed to take advantage of this development and create new sources of revenue and business opportunities.

With the acquisition by Xerox, there are numerous opportunities; for ITsavvy means more coverage and very good equipment. Company, which has already earned good name and success in IT services segment, will definitely be able to gain from Xerox’s international market and its customers’ base. This combination may make it possible for ITsavvy to develop its current customers’ businesses much faster as well as improve the range and quality of services offered to these customers.

The acquisition is also typical for the technology industry, which has recently seen large enterprises seeking to enhance their solutions’ functionality through the acquisition of startups. This approach enables organizations such as Xerox to rapidly accumulate knowledge and functional space in new arenas that would otherwise have to be situated up from scratch.

Earnings growth specialists will be particularly interested in whether this acquisition will have any effects on Xerox’s expanding years earnings. The company has said that the latter should help fortify plans to ramp up IT Services business as well as the releasing of cash. This may well prove to be important to Xerox as the company looks forward to solving emerging complexities within the new market environment.

Of even more value is the effect of this acquisition on the Chicago business environment. A major firm that has been operating in this local IT services market is Oak Brook-based ITsavvy. Getting bought out by a big company like Xerox might actually help the technology sector get more attention in the Chicago region.

Once the deal advances to its closing stages, the industry outlook will shift to the way that Xerox integrates the ITsavvy business and capitalises on its strengths. This integration success could create the perspective for Xerox for the further development of its IT services division and the general vision of the company’s evolution in the IT services market.

Thus, the acquisition indicated to all the stakeholders about the clear directions of the Xerox to become a significant player in the IT services market. In this fast growing sector where efficiency is central in meeting the need of its numerous customers, the integration of ITsavvy will be one area to look at should the company fail to counter effectively in its transformation process.