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Accenture Buys Financial Technology Consultancy Firm VERAX

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Continuing with its strategy of growing through acquisitions, Accenture Plc (ACN - Free Report) recently announced that it has acquired VERAX Solutions – a consulting firm – which mainly focuses on the financial sector in Canada. Financial terms of the deal remain undisclosed.

Founded in 2003, the privately-owned VERAX offers IT strategy, project and program management, enterprise architecture consulting, compliance and risk solutions, as well as business intelligence and data warehousing services to banking, insurance and capital markets companies based in Canada. The company currently has 180 employees and operates through its offices in Toronto and Halifax.

By integrating VERAX, Accenture will not only get a large talent pool, but will also gain a huge customer base in Canada, thereby expanding its reach in different markets. We believe that this acquisition will fortify Accenture’s presence in the financial consulting market and help in gaining more market share as well.

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 the product portfolio, as along with maintaining a leading position. We believe that regular acquisitions will significantly prove conducive to its revenue growth.

Notably, shares of Accenture have outperformed the industry to which it belongs to, in a year’s time. The stock has returned 12.7% compared with the industry’s gain of 12%.

Nonetheless, Accenture’s latest announcement of creating 15K new jobs by 2020, and investment plan of $1.4 billion for employee training and opening of 10 innovation centers across the U.S. cities may dent its bottom-line results. Increasing competition from the likes of DXC Technology Company (DXC - Free Report) , Cognizant Technology Solutions Corporation (CTSH - Free Report) and Navigant Consulting Inc. (NCI - Free Report) , as well as an uncertain macroeconomic environment may deter the company’s growth to some extent.

Currently, Accenture carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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