) is steadily progressing on its strategy to grow through
acquisitions. Recently, the company acquired ASM Research, Inc.,
the advanced information solutions and services provider
The acquisition will help Accenture expand its capabilities
and opportunities with the help of the Department of Defense
(DoD) and Veterans Affairs (VA). Post acquisition, ASM
Research will become a wholly-owned subsidiary of Accenture's
Financial Services (AFS). The company did not disclose the terms
of the deal, which is to undergo regulatory review and other
customary closing conditions.
Accenture is of the opinion that this strategic acquisition
will grow its healthcare business across North America. Moreover,
through this acquisition, Accenture would be able to utilize the
thirty years of experience ASM Research has in the government
vertical and its expertise in healthcare IT, information solution
and services, data analytics, cloud computing, human capital
management and agile software development.
A survey by the outsourcing and consulting services provider
reveals that the demand for its services from sectors, like
healthcare are increasing.
These acquisition strategy decreases the risks posed by the
slow-performing major economies, which currently provide around
80% of Accenture's total revenue. However, a stronger government
business is a positive because government spending on IT,
especially in areas such as healthcare, is likely to
The recent acquisitions have helped Accenture enter different
business segments and improve its technological base. Also, it
has been able to improve its customer base, bookings and
performance in the insurance, banking and healthcare sectors.
This also reflects strong demand for Accenture's services, which
is in turn favorable for its long-term growth prospects.
On the other hand, stiff competition from
Cognizant Technology Solutions Corp.
), a strained spending environment and Accenture's broad European
exposure (roughly 40.0%) may temper its growth to some
Currently, Accenture carries a Zacks Rank #3 (Hold). Investors
can also consider other technology stocks such as
Huron Consulting Group Inc.
Information Franklin Covey
). Both the companies carry a Zacks Rank #2 (Buy).
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