Xerox to Buy Intelligent Electronics

Xerox Corp. said it will buy Intelligent Electronics Inc. and its XLConnect Solutions unit for $415 million in cash in a move to increase the services it can sell with its growing digital-copier business. Xerox would pay $7.60 a share for Exton, Pa.-based Intelligent Electronics and $20 a share for the XLConnect shares that Intelligent doesn’t own. Intelligent owns 80% of XLConnect, a computer network-services provider with 1,500 employees. Stamford, Conn.-based Xerox dominates a digital-copier market that is expanding as businesses switch from traditional optical machines, which can’t store images. With XLConnect, Xerox can try to generate more revenue by setting up and servicing networks of computers and digital copiers, a business that increased 58% at Xerox last year, analysts said. In the fourth quarter, digital products made up 41% of Xerox’s revenue, up from 35% a year ago. XLConnect shares fell $3.25 to $19.25 and Intelligent Electronics fell 6 cents to close at $7.06 in Nasdaq trading. Xerox shares fell 6 cents to close at $91.69 on the NYSE.