ACS to buy AFSA Data, boosting government outsourcing
- By William Welsh
- May 17, 2002
Affiliated Computer Services Inc. has signed an agreement to acquire AFSA Data Corp. of Long Beach, Calif., for $410 million, the company announced May 16.
AFSA, a wholly owned subsidiary of FleetBoston Financial Corp. of Boston, provides business process outsourcing for education and health and human services to all levels of government. It has more than 3,500 employees and annual revenue of $265 million.
AFSA has been the principal subcontractor on ACS' direct student loan servicing contract with the Department of Education since 1993.
The acquisition is expected to be funded initially through a combination of a new $375 million term credit facility, which will borrow on the company's existing revolving credit facility, and existing cash on hand, Dallas-based ACS said.
Following the closing of the acquisition, which is expected to occur in June 2002, ACS intends to refinance the interim facility. Goldman, Sachs & Co. of New York served as the financial advisor to ACS on the transaction.
The AFSA transaction is expected to be accretive to fiscal 2003 earnings on a fully diluted basis by about $.07 per share. Therefore, ACS has increased its earnings guidance for fiscal 2003 from $2.11 per share to $2.18 per share.
William Welsh is a freelance writer covering IT and defense technology.