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DXC Expands Services Portfolio With Buyout of Argodesign

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DXC Technology (DXC - Free Report) recently announced the acquisition of product design consultancy firm, Argodesign, in a bid to ramp-up the digital transformation process of its clients.

Management at DXC believes that the buyout is a strategic move to support and cater to existing customers more efficiently, as well as boost user experience. This acquisition will also lead to the addition of product designing to DXC’s services portfolio.

Moreover,  both the companies will be able to expand the reach of their services to each other’s customer base with th acquisition.

While the terms of the acquisition are not yet disclosed, Argodesign will reportedly continue to retain its 45 employees, as well as independently run operations and projects like its interface for AI, CognitiveScale.

Digital Transformation Drives Growth

DXC’s efforts to expedite the digital transformation across its clients bode well for the company.

Per IDC, spending on digital transformation will reach $1.7 trillion globally by the end of 2019, up 42% from 2017. The research firm also predicted that all digitally transformed organizations are expected to generate at least 45% of their revenues from technologies adopted as a result of digital transformation.

These predictions make digital transformation all the more attractive to enterprises, driving them to adopt solutions, which will help accelerate the transition. These services and solutions, provided by DXC to its clients, are constantly being enhanced to boost client experience.

Acquisitions Boding Well for DXC

DXC’s continued focus on acquisitions to expedite growth is helping it gain access to newer markets and technologies.

Its recent System Partners buyout is in sync with the company’s strategy of expanding its reach in the Australian and New Zealand markets, and bringing about cloud-first approach to its IT operations.

It also completed the acquisition of Molina Medicaid, a unit of Molina Healthcare (MOH - Free Report) , strengthening DXC’s ability to provide high-quality services to state agencies in the administration of Medicaid programs. Presently, DXC provides health services to government agencies across 42 U.S. states.

This March, DXC acquired Australian Oracle (ORCL - Free Report) cloud partner M-Power Solutions, following which it bought Melbourne-based Microsoft (MSFT - Free Report) partner, Sable37.

We believe that the acquisitions will further strengthen DXC’s position as one of the leading cloud and IT service providers in the world. Moreover, the buyouts continue to help the company boost revenues amid intensifying competition in the cloud computing market.
 

DXC Technology Company. Revenue (TTM)

DXC currently 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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