Global professional services company Accenture (ACN) has acquired umlaut, an engineering consulting and services firm, to strengthen its Industry X capabilities. The terms of the deal have been kept under wraps.
Accenture is on an acquisition spree. It has acquired 22 companies since 2017 to boost its Industry X capabilities. Accenture’s Industry X deals with digital technologies, software development, product engineering, user experience, and product design.
Markedly, the COVID-19 pandemic has led to a surge in demand for digital technologies like cloud, artificial intelligence, and 5G. The buyout will enable Accenture to meet the growing demand of its clients by offering them enhanced services and helping them adopt the digital techniques in a better and easier way. It is expected to further boost Accenture’s Industry X design, innovation, and product development capacities, which will help companies address the shift to digitalization.
Through this acquisition, umlaut’s team of over 4,200 professionals across 17 countries will join Accenture’s Industry X services, which will further enhance the company’s capabilities across a varied range of industries, the company said.
Accenture CEO Julie Sweet said, “We predicted that digital would ultimately be applied at scale to the core of a company’s business – the design, engineering and manufacturing of their products. And, for nearly a decade Accenture has been building the unique capabilities and ecosystem partnerships to combine the power of digital with traditional engineering services.” (See Accenture stock analysis on TipRanks)
Sweet added, “COVID-19 has accelerated the need for companies to transform these core operations, and umlaut’s leading and highly-specialized engineering services will enhance our ability to meet the accelerating demand and also continue innovating for our clients.”
On June 10, Susquehanna analyst James Friedman reiterated a Buy rating on the stock with a $325 price target (13.8% upside potential).
After interacting with Accenture’s management, Friedman remains optimistic about Accenture’s business and expects it to continue to perform well, driven by strength in Artificial Intelligence.
The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 8 Buys versus 3 Holds. The Accenture average analyst price target of $301.73 implies 5.6% upside potential to current levels. Shares have increased 15.7% over the past six months.
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