Accenture Acquires Acceria (BUY Rating)

Technology services and outsourcing company Accenture plc. (ACN: 40.07 -0.18 -0.45%) announced the acquisition of Acceria, a privately-held French company. Industrial consulting firm Acceria focuses on business processes and methodologies for after-sales operations of industrial companies.

Following the acquisition, Accenture will be able to penetrate into the global automotive and industrial markets, thereby enhancing its management consulting capabilities.

Accenture believes that the combined effort of its consulting expertise and Acceria’s intellectual property will provide industrial customers with innovative business solutions, which will be targeted toward after-sales support.

After-sales service is provided by the manufacturers or suppliers for repairing, overhauling or maintenance of products. These services are critical for customer retention, as well as wining new customers. We believe that Accenture’s endeavor to tap industrial customers, including those in the automotive sector, will prove to be a success.

Though financial benefits arising from the deal remain uncertain due to lack of economic details, we believe that the successful adoption of the new business solutions will attract new industrial clients, strengthening Accenture’s consulting business.

Accenture follows an aggressive acquisition strategy to enhance its consulting and outsourcing capabilities and to improve profitability through gaining market share.

Last month, Accenture completed the acquisition of CadenceQuest Inc.’s assets. The acquisition will enhance Accenture Interactive’s suite of digital solutions, marketing analytics, retail marketing and merchandising solutions and platforms. Accenture expects its core capabilities to combine well with CadenceQuest’s on-demand customer analytics platform, enabling the company to better serve its existing clientele and also win new customers.

Accenture second quarter results missed the Zacks Consensus Estimate by a penny. Earnings of 60 cents per share were below the Zacks Consensus Estimate of 61 cents as revenue declined 2.1% from the year-ago quarter.

Despite improving trends noticed in Accenture’s businesses, we prefer to remain cautious until the revenue growth rate accelerates. Moreover, we believe that the recent economic turmoil in Europe will considerably rationalize Accenture’s growth prospects.

Analysts' Targets
Barclays Capital	$48
Overweight
Tuesday, June 22, 2010
Stifel Nicolaus	$53
Buy
Friday, April 09, 2010
Kaufman Brothers	$37
Hold
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