Accenture (ACN) apparently is ready to spend a combined $1 billion buying up digital, cloud and security-related IT companies in 2017. The figure surfaced during Accenture's Q1 2017 earnings call earlier this week. Much of the M&A effort involves "The New" -- a term that describes how Accenture is helping customers to transform from legacy processes to digital initiative.
"As it relates to our capital investments, we invested roughly $600 million primarily attributed to 10 acquisitions and we are well-positioned to invest at least $1 billion to acquire critical capabilities this year especially in The New," said Accenture CEO Pierre Nanterme during the earnings call.
It's sounds like he was referring to $1 billion in total acquisitions for the company's fiscal year 2017, though we don't know if he was referring to organic R&D investments as well. Nor do we know if the $1 billion figure includes some of the recent deals that Accenture has already completed.
Accenture's Recent Digital, Cloud & Security Acquisitions
Accenture has made multiple acquisitions in recent months. Chief among them:
- Digital: OCTO Technology, a digital consulting firm based in Paris; Karmarama, a creative agency in the U.K. and Allen International, a design consultancy that specializes in banking.
- Cloud: DayNine, a Workday consulting and services provider; and Nashco Consulting, a ServiceNow partner.
- Security: The company acquired Redcore in Australia.
- Vertical Markets: Accenture acquired Kurt Salmon for expertise in the retail industry.
Accenture has invested quite heavily in its Google G Suite, ServiceNow and Workday practices -- so it's a safe bet more acquisitions in those areas could be coming. We're also watching to see if IaaS-centric deals -- involving Microsoft Azure and/or Amazon Web Services partners -- emerge.
And in a surprising twist, Accenture has leveraged cloud services to move down market into the SMB sector.
Accenture Business Performance
Overall, Accenture's business appears to be performing well. Revenues rose 6 percent to $8.5 billion in Q1 2017, and earnings jumped 23 percent for the period. The company's digital, cloud and security services businesses now represent more than 40 percent of revenues, and generated more than 40 percent year over year growth.