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Accenture Inks Deal to Buy DayNine for an Undisclosed Sum


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Global IT services provider Accenture Plc (ACN - Analyst Report) recently inked an agreement to acquire worldwide Workday consulting and deployment services provider, DayNine. Financial details of the transaction were kept under wraps. The move is a part of Accenture’s strategy to strengthen its position in Workday so that the company can better serve clients around the world.

About DayNine
Founded in 2009, DayNine is a leading global Workday Services Partner that serves clients across an extensive range of industries including consumer goods, healthcare providers, pharmaceuticals, financial services, and communications, media and technology. The company has employee strength of over 260, serving at its offices in the U.S., Germany, UK, Japan and China.

Acquisition Synergies

As per Accenture’s press release, “Our clients are increasingly choosing Workday to drive their cloud transformations, so we are taking this important step to meet the growing demand.” DayNine helps organizations to transform their employee experience and financial management systems using Workday in order to gain maximum value and drive growth.

With this buyout, Accenture will be able to leverage the latest technology, provide enhanced performance and strengthen its position as a global leader in cloud-based applications as well as deploy advanced Workday solutions across technology, processes and people. We believe that the acquisition will help Accenture to improve its customer relationships and expand market share by solving business critical issues.

Post the acquisition, 400 DayNine professionals with 1,250 Workday certifications will join Accenture’s Cloud First Applications team, which specializes in delivering cloud services for Salesforce, Workday, ServiceNow, Alphabet’s (GOOGL - Analyst Report) Google and other cloud technology providers. DayNine CEO and co-founder Tim Ramos will lead the new jointly formed group.

According to Ramos, “Our combined teams and capabilities will be able to deliver unparalleled value for customers around the globe.”

Acquisitions have been one of the key growth strategies for Accenture. Recently, the company entered into an agreement to acquire Kurt Salmon – a strategy consulting firm – that mainly focuses on the retail industry.

Earlier this month, Accenture announced a deal to acquire New Energy Group – an Italy-based company that specializes in delivering Salesforce’s (CRM - Analyst Report) product and solutions. The move comes as part of Accenture’s strategy of strengthening its position across Europe as a provider of Salesforce services and cloud implementation.


Bottom Line

We are encouraged by Accenture’s strategy of growing through acquisitions. These buyouts have enabled the company to foray into newer markets, diversify and broaden its product portfolio, and maintain a leading position. We believe that regular acquisitions will significantly contribute to the company's revenue stream.

Accenture’s long-term prospects look promising due to sustained focus on new and innovative product launches, continuous investments in enhancing digital and marketing capabilities as well as major acquisitions.

However, increasing competition from Cognizant Technology Solutions (CTSH - Analyst Report) and International Business Machines Corporation remains a concern. Also, we are cautious about its near-term performance given a strained IT spending scenario. As per a research report by Gartner, worldwide IT spending is expected to remain flat year over year in 2016 at $3.41 trillion due to currency fluctuations triggered by the Brexit episode.

Currently, Accenture carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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