Affiliated Computer Services, Inc. F4Q09 (Qtr End 06/30/09) Earnings Call Transcript

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2009-08-06 19:28:10.0

Tags: Affiliated Computer Services Inc., Acquisition, Indiana, Call Transcript, Earnings, Citigroup Inc., Mergers & Acquisitions, Corporate Law, Investment, Finance, Business Operations, Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions). Our first question today comes from Ashwin Shirvaikar of Citigroup.

Ashwin Shirvaikar - Citigroup

My question is on your revenue target, you said half from acquisitions for the full year, which implies roughly $310 to $350 million of acquired revenue. So could you talk a little bit about what kind of acquisitions you have in mind? What is your pipeline looking like, things of that sort?

Lynn Blodgett

Thanks, Ashwin, this is Lynn. The type of acquisitions that we are looking for is as Tom Blodgett mentioned, we have three or four that are in Eastern Europe and one in Asia actually that we have been seriously considering. We are also looking at potential acquisitions in the government space that can help us in the area rounding out at our overall healthcare offering.

In the commercial space, we will continue to look for acquisitions that provide us with platforms we can leverage. We have done some nice acquisitions in our customer care area. That seems to be an area that we will continue to focus on.

Ashwin Shirvaikar - Citigroup

Okay and a separate question on Indiana. To get a worst case analysis of, if Indiana gets canceled, what is the financial impact to ACS?

Tom Burlin

Ashwin, this is Tom Burlin. It’s tough to quantify that because we can’t anticipate what course that may take. Obviously, we are deeply involved in the operations, today. We operate both the modernized and the as-is components of it. So, even a cancellation would take some type of unwinding. So, kind of tough to answer that.

What we are focused on obviously is its success where we have added several hundred people to that account, meet regularly with IBM and the state. Our focus right now is to be successful in this cap and to execute on it and continue to service Indiana.

Operator

Our next question comes from Julio Quinteros of Goldman Sachs.

Julio Quinteros - Goldman Sachs

I know there is a lot of moving parts to this to the story for fiscal '010 given everything that you guys just talked about. I guess to get to the point, I mean when can we expect to start to see the leverage in the business from the restructuring benefits and all of the things you guys have been working on for the last 12 months or so.

Obviously there is some incremental things to contemplate but at this point, can we expect to see a margin model here down the road that’s better than 11%, better than 12%? How do we think about that?

 

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