Accenture Beefs Up Digital Transformation Capabilities with String of Middle Market Acquisitions
The IT Services giants have been looking towards the middle market to broaden their suite of digital capabilities. While these behemoths historically favored building out their services and capabilities internally, in recent years many have begun to pursue inorganic growth through acquisition of specialized agencies and consultancies. No company has done so more aggressively and systematically than Accenture. The Dublin-based solutions provider has been increasingly active in the Digital Transformation space, making over 20 related acquisitions in the last twelve months. Additionally, we can expect M&A activity from Accenture to continue throughout the rest of 2019. Chief Financial Officer David Rowland told investors on this year’s first quarter earnings call that they expect to invest up to $1.5 billion in acquisitions during fiscal 2019.
In March 2019, Accenture acquired UK-based firm ?Whatif! for an undisclosed sum. ?Whatif! uses an experimentation-driven approach to innovation, helping clients with brand and consumer engagement, and product innovation. The acquisition will allow Accenture to expand its innovation capabilities to better help clients, including retailers and packaged goods brands, innovate.
Just one month later, in April 2019, Accenture acquired digital creative agency Droga5. In combination with Accenture’s existing strength in data and technology, Droga5 will help further integrate creative into Accenture’s digital transformation repertoire.
More recently, in October 2019, data-driven consultancy Sutter Mills was acquired by Accenture. The French-based target expands Accenture’s capabilities in data-driven marketing strategy, Adtech and Martech, enabling them to create hyper-relevant customer experiences at scale.
Also during October, Accenture acquired Seattle area product innovation and engineering services company Nytec. The acquisition bolsters Accenture’s already considerable consulting muscle. Nytec became part of Accenture’s digital transformation initiative Industry X.0, focused on the digital transformation of industry.
In the past month, Pharus successfully advised two UK based companies on their sale to Accenture. The first transaction saw global innovation agency Happen acquired, which will become a part of Accenture’s Industry X.0 business; thanks to its innovative expertise and enhanced growth solutions. The following week, Accenture announced its acquisition of another Pharus client Bow & Arrow. Bow & Arrow will support Accenture’s disruptive and innovative agenda with its own digital product and services consulting, which enables transformational and accelerated growth for its clients. Both Pharus-backed transactions exemplify Accenture’s proactive acquisition strategy to consolidate its position in the increasingly lucrative digital transformation space.