Accenture plc (ACN - Free Report) recently entered into an agreement to purchase Mackevision, an Emmy award winning company for visual effect related work on the famous television series, Game of Thrones. Gimv is one of the notable selling shareholders. However, the deal is subject to customary closing conditions and its terms have been kept under wraps.
Though the acquisition looks slightly out of place for Accenture, but the firm is aiming at improving the capabilities of Accenture Interactive platform, part of the company's digital marketing-services arm. Its foothold in the interactive content space will be bolstered with the buy-out of this producer of computer generated imagery (CGI) content based on its animation and 3D visualization abilities.
The combination of the two companies will enhance Accenture’s abilities to address the requirements of the next-generation customer experiences, innovative content generation and extended reality applications, thereby boosting Accenture’s top line.
Accenture stock has gained 37.4% over a year, outperforming the 32.3% rally of the industry it belongs to.
Per the press release, “Mackevision’s creation, visualization and production services are used for online product configurators, digital and print catalogues, virtual showrooms, point-of-sale kiosks, augmented and virtual reality experiences, as well as broadcast video and feature films. Mackevision has developed a differentiated ability to leverage engineering data to construct ‘digital twins’ of complex physical products.”
Mackevision is capable of producing all types of visual content from the “digital twins” courtesy of the latest technologies in CGI, augmented reality and virtual reality, which improves consumer experience and product designing.
Accenture is striving toward delivering a wider portfolio of services related to smart and connected products or platforms based on the capabilities of creating a digital imagery. Thus, the acquisition of Mackevision seems apt.
Additionally, with a strong clientele having the likes of Audi, BMW, Chrysler, Hyundai, Jaguar, Land Rover, Mercedes-Benz and Porsche, the addition of Mackevision holds promise for Accenture and its revenue growth.
Accenture which recently launched the Accenture Extended Reality (XR) practice is expected to benefit from the acquisition as it expands its presence in the industry. Per the industry analyst firm IDC, the XR industry is expected to reach $162 billion by 2020, and Accenture is on the right track to tap the opportunities with these initiatives.
Accenture has been boosting its digital marketing space in an inorganic way for a long time. Over the last five years, Accenture has acquired more than 17 businesses and integrated into this segment. Considering the growing need for digital marketing, we anticipate Accenture’s investment in digital marketing capabilities to be conducive to long-term growth.
Notably, these acquisitions have also helped the company gain a competitive edge over other digital marketing service providers, such as International Business Machines Corp., Dell and Deloitte.
Zacks Rank and Key Picks
Accenture has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the sector are NetApp, Inc. (NTAP - Free Report) , Broadcom Limited (AVGO - Free Report) and NVIDIA Corporation (NVDA - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term expected EPS growth rate for NetApp, Broadcom and NVIDIA are projected to be 11.3%, 13.8% and 10.3%, respectively.
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