ACS to acquire Mellon Financial's HR business

Affiliated Computer Services Inc. is buying the human resources consulting and outsourcing business of the Mellon Financial Corp. for $445 million in cash, the company announced today.

The acquisition will make Dallas-based ACS a stronger competitor in the human resources market and further strengthen its business process outsourcing capabilities, said Jeff Rich, the company's chief executive officer.

"We are gaining new capabilities, adding blue chip clients and talented subject matter experts," Rich said. Human resources outsourcing is one of the fastest-growing markets for the company, he added.

Pittsburgh-based Mellon Financial's human resource business currently serves about 3,000 clients, and its consulting business is the seventh-largest human resources consulting practice in the United States. Mellon pulled in about $660 million in revenue from it HR business last year.

ACS will acquire contracts with the states of Iowa, Mississippi and New York as a result of the deal, which still must win regulatory approval.

The company plans to fund the transaction and related costs from its existing $1.5 billion credit facility. The acquisition is scheduled to close in the company's fourth fiscal quarter.

About the Author

William Welsh is a freelance writer covering IT and defense technology.

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