Accenture’s Growth-Oriented M&A Strategy: Four Acquisitions in One Week

Accenture (NYSE: ACN), an Irish-American professional services company specializing in information technology services and consulting, has acquired four companies within the span of one week across Canada, the Netherlands, North Carolina and the UK. The purpose of these acquisitions is to integrate various components of the consulting supply chain and become a technology consulting leader within the industry. 

Eclipse Automation 

On September 29th, 2022, Accenture acquired Eclipse Automation, a leading supplier of custom automated manufacturing automation and robotics solutions headquartered in Cambridge, Ontario, Canada. The company specializes in custom automation and manufacturing across several industries: life sciences, transportation, energy, consumer, electronics and industrial. 

Acquisition of this company will allow Accenture to further automate their product lines by streamlining factories and plants through leveraging cloud, data and artificial intelligence. Eclipse Automation’s offerings include automated production machines and robots, as well as automation control systems. The acquisition rationale involves complementing features of Industry X, their digital engineering and manufacturing offering. 

In the past, Accenture’s strategies to strengthen the underperforming engineering, robotics and automation segments of their business included their 2020 acquisition of industrial-focused Myrtle Consulting Group, their fifth acquisition in 2021 of Pollux (a Latin American industrial robotics and automations company), and their acquisition of Callisto Integration in May 2020 which allowed them to expand into the manufacturing execution sector. 

Sentia 

On September 2nd, Accenture completed its acquisition of Sentia’s businesses located in the Netherlands, Belgium, and Bulgaria. Sentia is a leading provider of hybrid-hosting, cloud advisory and delivery services, as well as cloud transformation and migration. The private-equity backed company hosts a private cloud platform called Sentia Cloud that allows customers to utilize proprietary VM-based services, and they manage both private and public cloud migrations. 

The acquisition will allow over 300 cloud specialists of Sentia’s team to join Accenture Cloud First, Accenture’s platform dedicated to streamlining cloud migration, security, and data transformation processes for clients. Key players in the ecosystem that benefit from this capability include Google, Microsoft, Salesforce, Oracle and Adobe. Karthik Narain, Global Lead for Accenture Cloud First, highlighted its value-add: “Accenture Cloud First’s priority is to help clients with total enterprise reinvention by building their digital core, optimizing operations and accelerating growth.”

Roy Ikink, Managing Director and Lead of Accenture Technology in the Netherlands, spoke on the acquisition rationale further: “The acquisition of Sentia’s business in the Netherlands, Belgium, and Bulgaria enhances our capabilities in Europe, particularly around hybrid cloud and sovereign cloud. The Sentia team’s experience in this area will be invaluable in helping clients to address regional data privacy regulations.” 

The acquisition rationale involved enhancing Accenture’s capabilities in Europe around hybrid cloud. Ikink discussed the benefits further: “The Sentia team’s experience in this area will be invaluable in helping clients to address regional data privacy regulations.” 

From Accenture’s side, the purpose of this acquisition involved increasing their end-to-end cloud infrastructure capabilities across both public and private markets in Europe, allowing them to increase their market share which will allow them to further competitively differentiate themselves. 

MacGregor Partners

Accenture has also acquired MacGregor Partners, a supply chain consultancy and technology provider headquartered in Raleigh, North Carolina. The company specializes in warehouse robotics and logistics performance, distribution visibility and analytics, enterprise quality management, and inventory management systems. Their main services are in warehouse management systems and transportation management system implementations. 

The acquisition means that more than 100 employees will integrate with Accenture’s Intelligent Platform Services group, and the main goal is to expand Accenture’s supply chain network and fulfillment capabilities. Renato Scaff, North American Supply Chain and Operations Lead, highlighted the main reason for the acquisition: “The acquisition of MacGregor deepens our capabilities for supply chain network transformation and extends our skilled workforce in delivering effective solutions with our alliance partner, Blue Yonder.” 

Carbon Intelligence 

Accenture has also acquired Carbon Intelligence, a B2B environmental services company helping businesses understand and reduce their carbon footprint. Their past clients include Black Rock, Aviva Investors, and the Bank of England. They utilize a Science-Based Targets approach that involves providing clients with a clearly-defined strategy for reducing greenhouse gas emissions, and preventing further impacts of climate change. This comes as a result of increasing trends and pressures for corporations to adopt ESG practices. 

Their team of 160 strategists, data scientists, engineers and technologists will join Accenture to integrate their capabilities to better measure and interpret carbon data using artificial intelligence and visual technologies. 

Takeaways 

CEO Julie Sweet continues to believe that mergers and acquisitions play a key role in Accenture’s growth, and the value-add of Accenture’s four acquisitions in one week demonstrates their growth-oriented strategy. Their goal is to expand into various segments of the consultancy supply chain, and overseeing more components of the end-to-end process will allow them to have reduced errors, faster services and minimal costs. These acquisitions will propel Accenture further into overseeing a fully vertically integrated end-to-end supply chain, and providing value to their clients through utilizing current growing market trends such as digitalization, automation, and ESG. 

The acquisitions follow Accenture’s 2021 plan to allocate $2.5 billion on acquisitions during the company’s 2022 fiscal year. The budget is reduced from their initial goal of $4.0 billion, but the company continues to view M&A as a critical growth strategy. 

In the past, many companies have attempted to integrate all components of their supply chain. For example, take Katerra: a construction-technology startup that oversaw all components of the construction industry from conception, manufacturing, assembly and renovations. Though they achieved immense success initially, their ultimate demise can be attributed to several factors, but ultimately boiling down to how quickly they were scaling without a pre-established product-market fit, and unwise M&A decisions. Unlike Katerra, Accenture remains in-line with their pre-determined M&A budget, and their acquisitions are expected to add value to their business operations.