Technology consulting firms continue to acquire digital agencies as the worlds of IT, marketing, branding, and advertising continue to converge.
Three three most recent deals involve:
- Accenture buying Kolle Rebbe;
- Perficient acquiring Elixiter; and
- Tata Consultancy Services (TCS) buying W12 Studios.
Here's a snapshot look at each deal.
Accenture Acquires Kolle Rebbe
Accenture has been balancing organic growth and M&A deals to expand its cloud, security and digital transformation revenues.
The company’s latest deal comes from Germany, where it is acquiring Hamburg-based agency Kolle Rebbe. Founded in 1994, Kolle Rebbe provides its clients cross-channel advertising campaigns and digital content. The firm will be folded into the Accenture Interactive division, strengthening “its ability to create and deliver integrated brand experiences for clients in Germany and across other geographies,” the company said.
Accenture has growing experience in the digital agency world, having previously acquired Rothco. Additional Accenture acquisitions in recent months include:
- DAZ Systems Inc., a three-time Oracle cloud services partner of the year.
- Mindtribe and Pillar Technology for agile software and hardware development methods to speed customers’ digital transformations.
- Kogentix, an IT consulting firm loaded with more than 220 big data analytics and artificial intelligence (AI) experts.
Perficient Acquires Elixiter
Perficient is buying Elixiter, a Marketo partner and marketing consultancy with about $6 million in annual revenue. Perficient gains marketing cloud expertise, digital marketing and marketing automation services, and strategic client relationships, the company says. Roughly 40 consulting, technology, sales, and general and administrative professionals join Perficient as part of the deal.
In its most recent quarter, Perficient revenues were $123.9 million, up slightly from $123.7 million in the corresponding quarter last year. The company's key enterprise IT partners include IBM, Microsoft, Oracle, Adope and Salesforce.
Perficient has acquired multiple companies in the past year or so-- including:
- MicroStrategy partner Southport Services Group, a $17 million IT consulting firm and business intelligence specialist with 100 employees.
- Clarity Consulting, a Microsoft cloud partner that specializes in custom development, cloud implementations, and digital experience design.
- RAS & Associates, a $9 million management consultancy.
TCS Acquires W12 Studios
Tata Consultancy Services (TCS) is acquiring London-based digital design company W12 Studios for an undisclosed sum. TCS became the first India-based IT outsourcing company to cross the $100 billion valuation threshold in April 2018.
The W12 deal marks TCS's first digital acquisition.
W12, founded in 2012, will bring its design capabilities to TCS Interactive’s portfolio of services to help clients “deliver unique digital experiences across the entire user journey,” the company said. W12, which was founded in 2012, will continue to operate under the same name and leadership, the company said.
Agency Acquisitions
Major consulting firms invested more than $1.2 billion in agency acquisitions in 2017, up 134 percent from the previous year, according to marketing consultancy firm R3.
Among the key digital agency trends IT service providers are trying to monetize:
- augmented reality that blend our physical world with digital experiences;
- conversational user interfaces like Amazon Alexa; and
- personalized and hyper-targeted ad campaigns.
Still, blending the worlds or IT and creative digital services isn't easy. During the dot-com boom, dozens of so-called Web integrators emerged with advertising and marketing know-how. Popular names at the time included Razorfish, IXL, marchFIRST, Sapient, Scient, Viant. Many of those firms collapsed during the dot-com implosion.
Additional insights from Joe Panettieri.
