Consulting and outsourcing company
) is set to acquire Procurian for $375 million. The acquisition
will enhance Accenture's competence in procurement business
process outsourcing (BPO). The all-cash deal is expected to be
closed by this year.
Procurian, a subsidiary of
ICG Group, Inc.
), is headquartered in King of Prussia, Pa., and provides
comprehensive and strategic procuring and sourcing business
process services. It acts as a sourcing partner to 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 employs approximately 780 employees.
The acquisition not only better positions Accenture in the
procurement segment compared to other service providers such as
International Business Machines
), 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
Accenture has been on an acquisition spree and has already
acquired eight companies in 2013. Acquisitions have not only
expanded the company's customer base but have also improved its
bookings and performance in the insurance, banking and healthcare
sectors. This also reflects the effectiveness of Accenture's
services, which is in turn favorable for its long-term growth
Moreover, in the recently concluded quarter, Accenture
recorded higher bookings growth and solid performance across
insurance, banking and healthcare segments. Additionally, the
company's associations with Vodafone and Telenor for providing IT
services are expected to benefit, going forward.
However, a strained spending environment and Accenture's broad
European exposure may temper its growth prospects to some
Currently, Accenture has a Zacks Rank #3 (Hold).
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