) has been on a deal-signing spree of late. After entering into an
alliance with CHOICE Administrators Exchange Solutions for
delivering cloud-based Health Insurance Exchange (HIX) solutions
and renewing its deal with New Mexico's Human Services Department
last month, the company has now recorded yet another contract
The company will now provide electronic benefit transfer (EBT)
services to the state of Illinois for distributing benefits for the
Supplemental Nutrition Assistance Program (SNAP) along with
providing cash assistance on a refillable card, which can be used
for making purchases at certified retailers and ATMs. The contract,
which has a five-year tenure, is valued at $42 million, with an
option to extend it for another five years.
Awarding the contract to Xerox was a natural step for the state
of Illinois. The company has provided support to the state's
nutrition program for almost a decade as a subcontractor. The new
deal makes Xerox the prime contractor for the program, enabling it
to process transactions, manage relationships with retailers and
ATM networks, issue EBT cards and provide customer support.
Moreover, Xerox has proven expertise in providing EBT services.
It caters to 20 million people in 16 states which run such
programs. Hence, the current deal further strengthens the company's
position in this space.
In addition, the company is deeply involved with a number of
states for administering different types of programs, such as
health care and nutrition. It is focused on bringing innovation in
this sector through its solutions which enable the states to
implement the required programs at a low cost.
We currently have a long-term Neutral recommendation on Xerox.
The company, which competes with
), maintains a Zacks #3 Rank, which translates into a short-term (1
to 3 months) Hold rating.
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