NEW YORK – Accenture (NYSE: NYSE:) has announced its intention to acquire Logic, a retail technology service provider, to bolster its retail technology capabilities. Logic, known for its expertise in enhancing customer loyalty and agility for retailers through technology, will bring approximately 800 professionals to Accenture Technology’s already extensive pool of talent.
Founded in 1997 and based in Minneapolis, Minnesota, Logic has a footprint in 11 countries, serving over 150 retail clients globally. This acquisition is poised to enhance Accenture’s services in merchandising, digital, analytics, and cloud, aiming to help retail clients navigate the challenges of a rapidly evolving marketplace.
Jill Standish, Accenture’s global Retail industry practice lead, emphasized that the integration of Logic’s specialized skills will augment Accenture’s ability to deliver comprehensive and transformative retail solutions. Bill Szlaius, Co-Founder & CEO of Logic, expressed confidence that joining forces with Accenture would accelerate their mission and expand their reach, benefiting their clients and team.
Karthik Narain, group chief executive – Technology at Accenture, highlighted that the acquisition would enrich Accenture’s digital, data, and cloud capabilities, further empowering the company to deliver impactful outcomes for clients.
The acquisition, which is subject to customary closing conditions including regulatory approvals, has not had its terms disclosed. The completion of the transaction will mark a strategic step for Accenture in its commitment to assisting retailers in their technological transformations.
The information provided in this article is based on a press release statement.
In other recent news, Accenture has demonstrated steady growth in its Third Quarter Fiscal 2024 Earnings Conference Call, disclosing a revenue of $16.5 billion, marking a 1.4% increase in local currency, and an operating margin improvement to 16.4%.
New bookings saw a substantial increase, totaling $21.1 billion. Furthermore, the company’s GenAI business reached $2 billion in sales year-to-date, indicating Accenture’s emphasis on large-scale transformations, particularly in artificial intelligence.
Accenture has recently expanded its silicon design capabilities with the acquisition of Cientra, a firm specializing in custom silicon solutions. This strategic move aims to meet the growing demand for semiconductor innovation, driven by advancements in various technological sectors. The integration of Cientra’s skilled engineers will enhance Accenture’s existing silicon design experience.
On the analyst front, Morgan Stanley adjusted its stance on Accenture, moving from an Overweight to an Equal-weight rating, citing concerns of a slowdown in cloud revenue growth and an increase in mergers and acquisitions spending relative to free cash flow.
Goldman Sachs, on the other hand, initiated coverage on Accenture shares with a Neutral rating, acknowledging the company’s strong position in generative AI but also citing potential cyclical economic headwinds.
For the upcoming Q4 fiscal 2024, Accenture projects its revenue to be between $16.05 billion and $16.65 billion, indicating 2% to 6% growth in local currency. The full fiscal year 2024 growth is expected to be between 1.5% and 2.5% in local currency, with operating cash flow forecasted to be between $9.3 billion and $9.9 billion.
InvestingPro Insights
As Accenture (NYSE: ACN) gears up to enhance its retail technology services through the acquisition of Logic, the company’s financial health and market position provide a backdrop for understanding this strategic move. With a market capitalization of $199.11 billion and a Price to Earnings (P/E) ratio of 28.61, Accenture stands as a substantial entity in the IT Services industry, indicating its capacity to undertake and integrate such significant acquisitions.
InvestingPro data shows that Accenture has a Price to Book (P/B) ratio of 7.18 as of the last twelve months ending Q3 2024, which suggests the stock is trading at a premium compared to its book value, a reflection of the market’s high regard for the company’s assets and potential for future growth. Additionally, the company has demonstrated a steady revenue growth of 1.46% over the same period, underscoring its ability to increase earnings – a key factor that could be further bolstered by the Logic acquisition.
Accenture’s commitment to shareholder returns is evident with a dividend yield of 1.62% and a noteworthy track record of maintaining dividend payments for 20 consecutive years. This consistency, coupled with a dividend growth of 15.18% in the last twelve months as of Q3 2024, aligns with the InvestingPro Tip that the company has raised its dividend for 4 consecutive years, showcasing financial stability and a shareholder-friendly approach.
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