On Oct 3, 2013, consulting and outsourcing company,
) announced the completion of its acquisition of Procurian for
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The all-cash acquisition not only provides Accenture an edge over
other service providers such as
International Business Machines
) in the procurement segment, but also eliminates a direct
competitor. Moreover, Accenture can leverage Procurian's core
competencies in the procurement outsourcing market, with its
various tools and applications, to gain new clients and serve the
existing ones in a better manner.
Procurian, a subsidiary of
ICG Group, Inc.
), is headquartered in King of Prussia, Pennsylvania, and
provides comprehensive and strategic procuring and sourcing
business process services. It acts as a sourcing partner to
business process outsourcing (BPO) service providers such as
Genpact and Capgemini. Procurian's clients include the likes of
Hertz and Kimberly Clark. Procurian has offices in the U.S.,
India, the U.K., the Czech Republic, China and Brazil and its 780
employees have been inducted into Accenture.
Moreover, Accenture has resorted to strategic acquisitions to
diversify its offerings and expand its operating markets. The
strong cash balance ($5.63 billion) and robust operating cash
flow ($1.27 billion in the fourth quarter of 2013) enables the
company to go for strategic acquisitions.
Accenture is regularly enhancing its client base, which has
helped it to record strong bookings and witness robust growth
across insurance, banking and healthcare segments.
However, a constricted spending environment and Accenture's broad
European exposure may temper its growth prospects to some extent.
Moreover, competition from Cognizant and IBM are expected to
remain the headwinds, going forward.
Currently, Accenture has a Zacks Rank #4 (Sell).