Accenture to Buy ClientHouse

Zacks

In a bid to expand its capabilities in Europe, Accenture Plc. (NYSE:ACN) is set to acquire ClientHouse, a provider of cloud-based services. Financial details of the deal were not disclosed.

ClientHouse is one of the leading Cloud Alliance Partners of Salesforce.com, Inc. (NYSE:CRM), as well as Veeva Systems, which provides cloud-based services to biotech companies. Also, ClientHouse is the first authorized training center for Salesforce.com in Europe.

With this acquisition, Accenture will be in a better position to leverage the latest technology for its clients, provide enhanced performance and strengthen its position as a global leader in Software as a Service (SaaS) based applications and as a provider of salesforce.com services. The acquisition will also help Accenture to improve its customer relationships and expand market share by solving business critical issues.

Moreover, Accenture can leverage ClientHouse’s core competencies in cloud-based CRM solutions to gain new clients.

Accenture resorts to strategic acquisitions to diversify its offerings and expand its operating markets. A strong cash balance ($4.53 billion) and operating cash flow ($181.0 million in the first quarter of 2014) enable the company to make frequent acquisitions.

Accenture is also building its client base, which has helped it to record strong bookings and witness robust growth across insurance, banking and healthcare segments. This also increases demand for Accenture’s services, which is favorable for its long-term growth.

However, a cautious spending environment and Accenture’s broad European exposure may temper growth prospects to some extent. Moreover, competition from Cognizant Technology Solutions Corp. (NASD:CTSH) and International Business Machines (NYSE:IBM) is expected to remain a headwind, going forward.

Currently, Accenture has a Zacks Rank #2 (Buy).
 

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