Accenture (ACN) Closes Consultancy Firm LabAnswer Buyout

Accenture Plc (NYSE:ACN) recently announced that it has completed the acquisition of LabAnswer, a research and laboratory informatics technology consulting firm. Notably, the two companies had entered into the deal last month. However, financial details of the transaction remain undisclosed.

Headquartered in Sugar Land, TX, LabAnswer is specialized in providing informatics consultancy services to scientific and research laboratories. With approximately 250 employees, apart from life sciences, the company offers its services to various other industries, including chemicals, resources, energy, consumer goods, and government.

With the successful completion of the buyout, the company has established a new business division – Accenture Scientific Informatics Services.

Accenture is planning to leverage its digital technologies such as artificial intelligence, automation, analytics and cloud, with a fundamental redesign of the scientific user experience. With this, the company’s new division will be able to help life sciences companies in better capturing, managing, integrating and analyzing complex research data, thereby giving better ideas to identify new and more effective treatments for patients.

We believe that this acquisition will enhance Accenture’s portfolio of life sciences services. The acquisition of LabAnswer will not only bring in a huge talent pool, but will also expand its reach in different markets.

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 well as maintain a leading position. We believe that regular acquisitions will significantly contribute to its revenue stream.

Notably, shares of Accenture have outperformed the industry, over the last one year. The stock has gained 13.9% compared with the industry’s gain of 13.2%.

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 will likely dent its bottom-line results. Increasing competition from the likes of DXC Technology Company (NYSE:DXC) and Cognizant Technology Solutions Corporation (NASDAQ:CTSH) , as well as an uncertain macroeconomic environment may deter the company’s growth to some extent.

Currently, Accenture carries a Zacks Rank #3 (Hold).

A better-ranked stock in the same industry is Exponent Inc. (NASDAQ:EXPO) , which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The stock has surpassed the Zacks Consensus Estimate thrice and missed the same in one occasion, over the trailing four quarters. The long-term expected EPS growth rate for the company is 12%.

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