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Accenture Announces Acquisition of Majority Stake in IMJ

Accenture plc ACN has announced the acquisition of majority control in IMJ Corporation (IMJ), a full-service digital agency. The acquisition is part of the company’s efforts to bolster its digital marketing capabilities in Japan. The financial details of the transaction were kept under wraps.

The deal is expected to close by the end of the year.

IMJ

Started in 1996, IMJ helps companies in transforming their businesses through its end-to-end digital marketing services. Over the years, the company has grown into one of the largest independent digital agencies in Japan in terms of headcount.

Apart from this, its portfolio includes technology development, and design and usability services. Furthermore, it provides digital strategy services that include strategies to improve the brand identity of its clients, thereby helping them to maximize return on investment (ROI) of their digital programs.

IMJ will join the Accenture Interactive platform, a part of the company's digital marketing-services arm, Accenture Digital. Accenture Interactive was formed in 2009 to deliver superior consulting, technology and analytics services to chief marketing officers (CMOs).

Rationale behind the Acquisition

Since the formation of Accenture Interactive, the company has made significant acquisitions to enhance its digital marketing capabilities, including the acquisition of Reactive Media Pty Ltd., an Australian digital services provider and Brightstep, a Swedish digital content and commerce solution provider.

This acquisition will help Accenture to provide end-to-end digital marketing services, which will bring a deeper and broader set of digital solutions to clients.

Furthermore, according to Atsushi Egawa, country managing director at Accenture Japan “Acquiring a majority stake in IMJ provides us with enhanced capabilities to deliver digital services in this dynamic market.”

IMJ on the other hand will be able to leverage Accenture Interactive’s complete suite of digital marketing services. The firm will now be able to deliver a wider range of services and solve even more challenging and technically sophisticated workloads for its clients.

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

Although Accenture’s strategy of growing through acquisitions is encouraging, we are slightly cautious because of intensifying competition from the likes of Cognizant Technology Solutions CTSH, and a strained IT spending environment.

Currently, Accenture has a Zacks Rank #2 (Buy).

Another well-ranked stock in the technology sector is Lexmark International Inc. LXK, sporting a Zacks Rank #1 (Strong Buy).

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