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Accenture Announces Acquisition of Life Sciences Company ESP

Zacks Equity Research

Accenture plc ACN yesterday announced that it is going to acquire Cork, Ireland-based life sciences company, Enterprise System Partners (“ESP”). Upon closure, ESP will join Accenture Industry X.0. Financial terms of the deal were kept under wraps.

Founded in 2003, ESP provides consulting and manufacturing services to the life sciences industry. It is the latest of the many buyouts that Accenture has made to expand Accenture Industry X.0 in North America and Europe. These include hardware engineering firm Mindtribe, embedded software company Pillar Technology and design consultancy designaffairs.

Shares of Accenture have gained 16.1% year to date, outperforming 14.1% growth recorded by the industry it belongs to.


How Will Accenture Benefit?

The combination of Accenture Industry X.0’s capabilities and ESP’s manufacturing solutions is expected to enable Accenture expand its life sciences client base. It will enable Accenture’s clients to attain a flexible, efficient and cost-effective production process with the help of engineering and product lifecycle management, advanced analytics and artificial intelligence.

Accenture PLC Revenue (TTM)


Accenture PLC Revenue (TTM) | Accenture PLC Quote

This in turn should boost the company’s Products segment that includes the Life Sciences industry group, and serves medical technology, pharmaceutical and biotechnology companies. The segment performed well in the last reported quarter, with revenues of $2.93 billion, increasing 8% year over year on a reported basis and 10% in local currency.

Zacks Rank & Stocks to Consider

Currently, Accenture carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Business Services sector are Omnicom OMC, Robert Half RHI and Automatic Data Processing ADP. While Robert Half sports a Zacks Rank #1 (Strong Buy), Omnicom and Automatic Data Processing carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term expected EPS (three to five years) growth rate for Omnicom, Robert Half and Automatic Data Processing is 6.9%, 8.4% and 12.8%, respectively.

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