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Accenture Continues to Win Deals

Zacks Equity Research

Accenture plc (ACN) announced a deal win from United Arrows Ltd. last week. Per the deal, Accenture will help the company to develop a new system to manage its merchandise. United Arrows is one of Japan's leading apparel retailers and has 208 branches. Financial terms of the contract were not divulged.

Per the contract terms, Accenture will be responsible for designing, developing and managing the new merchandise management system. The system will form a part of United Arrow’s ongoing information technology (IT) transformation program, UA 2.0. Accenture will develop the system in phases with the first phase scheduled to start by 2014.

Apart from this, Accenture also won a management consulting service contract from Elm, a Saudi Arabia-based company engaged in providing secure e-business, IT, project support and government outsourcing services. Under the terms of the contract, Accenture will provide consulting services to Elm’s newly set up unit, Elm Learning, Training & Development Solutions (Elm LTDs). With Accenture’s consultation, the Elm LTDs will be able to deliver innovative learning and training programs to its clients.

Financial details of the deals have not been discussed. Over the past few weeks, Accenture has won a number of deals and we believe that all these will drive solid top-line growth.

We also believe that the synergies from the recent acquisitions such as, U.K.-based design agency, Fjord (May 7) and Hong Kong-based online marketing consultant, Acquity Group Ltd. (AQ) (May 17) will further strengthen Accenture’s revenue streams. These two acquisitions will position Accenture well in the online and digital marketing space, which holds great potential.

Currently, Accenture has a Zacks Rank #2 (Buy). Investors may also consider other stocks in the sector that are performing better. Information Services Group Inc. (III), with a Zacks Rank #1 (Strong Buy) and Towers Watson (TW) with a Zacks Rank #2 (Buy) are worth buying.

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