Global consultancy firm Accenture has acquired New Zealand-based SAP and cloud solutions technology firm Zag. The company did not disclose the financial terms of the transaction but according to a report by the Australian Financial Review (or AFR) the deal is valued at $45 million.
Accenture’s (ACN) Zag acquisition will strengthen the company’s cloud capabilities across New Zealand and Australia and will help in meeting the rising demand from organizations migrating to cloud and SAP’s next-generation products.
Accenture has made several investments across Australia and New Zealand over the past 18 months, including the acquisitions of supply chain management and data analytics company Icon Integration and business strategy and econometrics firm AlphaBeta in February 2020.
“By pairing Accenture’s global expertise with Zag’s local talent and insight, this acquisition will strengthen our ability to help clients accelerate their business transformation using SAP and Cloud technologies delivering more value from the new platforms,” said Accenture’s New Zealand Managing Director Ben Morgan.
Last month, Citi analyst Ashwin Shirvaikar lowered his price target for Accenture to $265 from $269 but maintained a Buy rating following the company’s fiscal 4Q results. The analyst stated that the stock’s post-earnings selloff is justifiable given the “modestly lower-than-expected” revenue combined with a valuation that was above-historical levels.
The analyst recommends buying into the weakness of the stock given Accenture’s “solid” bookings. (See ACN stock analysis on TipRanks)
The rest of the Street has a Moderate Buy analyst consensus on ACN based on 8 Buys versus 5 Holds and 1 Sell. The average analyst price target of $241.92 implies upside potential of about 8.3% in the coming months with shares already rising 6.1% year-to-date.
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