Image source: Xerox Corp.
What happened
Shares of Xerox Corp. (XRX) were up 15.5% as of 12:30 p.m. EST Tuesday after the company successfully completed its spinoff of business process services specialist Conduent Incorporated (CNDT 1.32%).
So what
Going forward, Xerox can now focus on taking market share in the digital print technology and services industries. More specifically, Xerox states its "financial model and revitalized business strategy will enable strong free cash flow generation and margin expansion, as well as targeted investments in attractive growth areas, such as document outsourcing and solutions for small and medium-sized businesses."
"The successful completion of the separation sharpens our market focus and commitment to our customers," added Xerox CEO Jeff Jacobson. "I am confident the transformational actions we are implementing position Xerox for long-term success and unlocks shareholder value."
Now what
Per the terms of the separation, Xerox shareholders already received one share of Conduent common stock on Dec. 31, 2016, for every five shares of Xerox common stock they owned as of Dec. 15, 2016. Xerox also received $1.8 billion in cash from Conduent, which it will use along with existing cash to retire roughly $2.0 billion in debt.
In the end, it seems there's little not to like about this spinoff for Xerox shareholders since it positions the company well both financially and from a business standpoint to capitalize on its core growth opportunities. As such, it's no surprise to see shares trading significantly higher today.
