Accenture Inks Deal To Buy MXM, Strengthen Digital Suite

Accenture plc (NYSE:ACN) recently inked a deal to acquire New York-based digital agency, Meredith Xcelerated Marketing (MXM).

Subject to customary regulatory approvals, the deal is anticipated to close in the next two months. The financial terms of the deal have been kept under wraps. Post the completion of the deal, MXM’s 450 employees will be part of Accenture Interactive.

Following the announcement of the tentative deal, shares of Accenture gained 4.1% to close the trading session on Mar 29 at $153.50. Moreover, the stock has performed pretty well in the past six months. Shares of Accenture have gained 14.3%, outperforming the industry’s gain of 10.8% in the said time frame.

MXM is engaged in content creation, integrated marketing and cross-channel strategy development, particularly in the automotive, consumer brands and financial services industries. MXM’s former owner was media conglomerate - Meredith Corporation (NYSE:MDP) . The divesture came on the back of Meredith’s strategic initiatives of reviewing its media assets’ portfolio and sale of non-core brands; related lay-offs and so on, in order to make the integration of its recent buyout of Time Inc. smooth.

Accenture Looks to Boost Digital Marketing Capabilities

The buyout appears to be part of Accenture’s continuous efforts to strengthen digital marketing capabilities. It will assist Accenture in creative content strategy, digital marketing and boost its marketing services by enhancing its data and content offerings. It will help the company expand its studios in several U.S. markets - Dallas, Des Moines, Detroit, Los Angeles, New York and Washington D.C.

Considering the growing need for digital marketing, we expect Accenture’s investment in digital and marketing capabilities to boost its long-term growth. This will also help the company in effectively competing with other digital marketing service providers such as International Business Machines (NYSE:IBM) , Dell and Deloitte.

Zacks Rank & Stocks to Consider

Currently, Accenture is a Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A better-ranked stock in the broader Business Services sector is CRA International (NASDAQ:CRAI) sporting a Zacks Rank #1.

Sales and earnings for CRA International are estimated to rise 8.5% and 51.5%, respectively, for the current quarter.

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