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Accenture (ACN) Signs Agreement for Knowledgent Takeover

Zacks Equity Research

Accenture plc ACN announced yesterday that it has inked a deal to acquire New Jersey-based data intelligence company, Knowledgent.

Knowledgent offers data strategy and architecture, data engineering and data management services. It employs more than 200 information specialists. The deal closure is subject to customary closing conditions. Financial terms have been kept under wraps.

Bhaskar Ghosh, group chief executive, Accenture Technology Services, stated, “With the acquisition of Knowledgent, we can accelerate our data services to clients, using Knowledgent’s top-notch talent, industry experience and proven data solutions.”

We observe that shares of Accenture have declined 6.3% on a year-to-date basis, against the industry’s rise of 0.5%.

How Will Accenture Benefit?

The acquisition is a part of Accenture’s efforts to expand data management capabilities. It is expected to help Accenture leverage Knowledgent’s cutting-edge data technologies and experience in the life sciences, healthcare as well as financial services industries to develop comprehensive, end-to-end data management solutions.

Our Take

We believe that the buyout will boost Accenture’s Communications, Media & Technology segment. It offers services that help clients shift to data-driven and platform-based models. Performance in the segment was particularly strong in the last reported quarter with revenues of $2.09 billion improving 15% year over year on a reported basis as well as in terms of local currency.

Zacks Rank & Stocks to Consider

Currently, Accenture carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A few better-ranked stocks in the Zacks Business Services sector are Total System Services, Inc. TSS, Navigant Consulting, Inc. NCI and BG Staffing, Inc. BGSF, each carrying a Zacks Rank #2 (Buy).

The long-term expected EPS (three to five years) growth rate for Total System Services, Navigant Consulting and BG Staffing is 14.2%, 13.5%, and 20%, respectively.

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