Xerox Corp. is struggling because offices are going paperless, and copy machines are not as busy or as necessary as they used to be. In an effort to offset this declining trend, they decided to buy Affiliated Computer Services for $6.4 billion in cash and stock to get in the market of providing outsourcing services

Xerox will pay $63.11 for each ACS share, roughly a 34% premium to Friday’s closing price. ACS stockholders will receive a total of $18.60 in cash and 4.935 shares of Xerox stock for each of their shares. In addition, Xerox will assume ACS’s debt of $2 billion and issue $300 million of convertible preferred stock to ACS’s Class B shareholder. ACS shares jumped 13.42% at last check to $53.60, while Xerox skidded about 16% to stand at $7.53.  The deal is expected to close in the first quarter of 2010.

Some say it is a bold move by CEO Ursula Burns, but it may also be a desperate one.  On a call with analysts, Burns said buying ACS is a “game-changing initiative.” Business-process outsourcing, or BPO, is a $150 billion market and is growing at about 5% a year. The market is large and growing. However, will buying into a market work? Competing with offshore companies that do nothing but BPOs will be tough. Game changes at large companies typically do not work well. There are too much baggage and inertia, and too much difference in ways to do business and in culture.