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Accenture Completes Kolle Rebbe Buyout, Focuses on Germany

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Accenture plc (ACN - Free Report) announced last Friday that it has completed the acquisition of Germany’s creative agency Kolle Rebbe. The financial terms of the deal were kept under wraps.

Kolle Rebbe, engaged in devising cross-channel advertising campaigns and digital content for renowned brands, is now a part of Accenture Interactive. The subsidiary will have an enhanced ability to conceive and deliver integrated brand experiences for global clients on expanded portfolio of marketing as well as digital services.

Shares of Accenture have fared well in the past six months. The stock has increased 3.2% compared with the industry’s rise of 2.8%.

Boosting Presence in Germany

The buyout highlights the company’s focus on strengthening foothold in Germany. In line with this, Anatoly Roytman, Accenture Interactive’s Europe, Africa and Latin America lead, stated. “With the addition of Kolle Rebbe to the Accenture Interactive team, we will greatly strengthen our ability to create, build and run the greatest customer experiences for our clients in Germany.”

As a part of expansion endeavors in Germany, Accenture also acquired strategic design consultancy designaffairs in June 2018. The consultancy became a part of its Industry X.0 team. Furthermore, Accenture Interactive acquired computer-generated imagery and immersive content creator, Mackevision, in January. In 2017, Accenture Interactive even acquired a majority stake in digital agency SinnerSchrader.

Our Take

We believe that the buyout will boost the Communications, Media & Technology segment that offers services to communications, electronics, high technology, media and entertainment industries.

In the last reported quarter, revenues in the segment totaled $2.09 billion, up 15% year over year on a reported basis as well as in terms of local currency.

Zacks Rank & Stocks to Consider

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

A few better-ranked stocks in the Zacks Business Services sector are WEX Inc. (WEX - Free Report) , Total System Services, Inc. (TSS - Free Report) and Paychex, Inc. (PAYX - Free Report) , each carrying a Zacks Rank #2 (Buy).

The long-term expected EPS (three to five years) growth rate for WEX, Total System Services and Paychex is 15%, 14.2%, and 8.5%, respectively.

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