The acquisition figure consists of a $180m cash payment, and secured promissory notes totalling $220m, subject to certain customary pre- and post-closing adjustments and escrow arrangements.
The transaction is expected to complete during the fourth quarter of 2024 and remains subject to merger clearance control.
Oak Brook, Illinois-based ITsavvy is a portfolio company of GenNx360 Capital Partners, a New York-based private equity firm.
John Bruno, president and chief operating officer at Xerox, said: “As part of our Reinvention we have created a greater organisational focus on our emerging IT Services capabilities to diversify our revenue streams in the geographies we serve.
“ITsavvy’s complementary offerings, aligned with our strong reputation, should accelerate growth in the United States, Canada, and the United Kingdom, while creating new avenues for us to help existing and new clients transform the way they work.
“They have a proven track record of success, and we look forward to bringing this highly capable and experienced team into the fold.”
Founded in 2004, ITsavvy has grown its revenue to more than $400m (on a trailing twelve-month basis) by offering a comprehensive suite of lifecycle, deployment, and managed IT services to assist with clients’ most critical networking, cloud migration and workplace productivity needs.
GenNx360 said that during the period of its investment in ITsavvy, the company experienced impressive organic growth, completed an acquisition of a highly strategic AIOps-enabled managed services provider, and significantly increased overall profitability through several well-executed margin enhancement initiatives.
It also launched an AI and Intelligent Automation strategy, which included commercialising an AI offering to better serve the company’s clients, as well as optimising its internal operations.
Munu Gandhi, CEO at ITsavvy, commented: “We are thrilled to join the Xerox team and eager to contribute to the growth of Xerox IT Services.
“Together with Xerox, we plan to expand the portfolio of high-value services for our growing client base throughout the US, UK and Canada.”
Xerox said the deal supports the company’s Reinvention strategy and commitment to expand its IT Services business, “while continuously bringing innovative solutions to Xerox clients’ workplaces”.
The acquisition is expected to be immediately accretive to adjusted earnings per share and free cash flow.
Xerox management said it will further discuss the acquisition during its third quarter 2024 results.
