Document Management News

Xerox and and Affiliated Computer Services (ACS) have settled a class action lawsuit which could have blocked Xerox's proposed $6.4bn acquisition of ACS - but another class lawsuit is still threatening to stop the deal.

Xerox announced that it was taking over ACS in September, as part of its strategy of expanding its document management services business. ACS provides lucrative data outsourcing services to both large government bodies and enterprises.

However, the proposed partners were almost immediately challenged by investors over the timing, value and terms of the deal. Those objections were backed by the Shareholders Foundation.

The class actions alleged breaches of fiduciary duty and other violations of state law related to the deal. One lawsuit was filed in Delaware and another in Texas.

Xerox and ACS now say they have "resolved claims" made in the consolidated action filed by ACS shareholders in Dallas County, Texas. The plaintiffs have withdrawn their motion for a temporary and/or permanent injunction, said Xerox and ACS.

The settlement makes it easier for ACS to accept a higher offer from another potential bidder, if one comes forward. The Texas action had been brought by ACS shareholder City of St. Clair Shores Police and Fire Retirement System, which was joined by other shareholders.

The class action brought by ACS stockholders in Delaware is still pending. Xerox rival Canon recently announced that it was acquiring Oce to increase its worldwide share of the document printing business.