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Accenture maintains M&A mantra, says no plans for big deals

Accenture PLC has no current plans to pursue big deals, though it could announce one should the right opportunity come along, with CEO Julie Sweet saying the current acquisition strategy has served the company well.

The company invested approximately $1.2 billion across 33 acquisitions over last fiscal year, Accenture CFO Kathleen McClure said Sept. 26 during the company's fiscal fourth-quarter earnings call.

"We've always said that we could do a larger acquisition, but it would really need to make sense for us," Sweet told analysts during the call.

Currently, there is no plan to go after big deals, but the company has the capability to do so if needed, said the CEO, who took the helm Sept. 1 and previously headed the business in North America.

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Some 20 of the acquisitions were in digital and security, while six were in technology. Meanwhile, Accenture did four deals in the financial services area.

Accenture's acquisition strategy focuses on scaling "hot areas in the market," adding new capabilities or deepening industry and functional expertise, Sweet said.

"Each year, we're going to look at where we need to either scale, add new capabilities or add industry expertise," Sweet said, adding that market conditions and the availability of potential targets will dictate what the company does next.

The company is targeting revenue growth in the range of 5% to 8% in fiscal 2020 in local currency, with approximately 2% contribution from M&A in inorganic terms, which is nearly unchanged from fiscal 2019, McClure said.

Accenture reported $43.22 billion in revenue in fiscal 2019, up from $40.99 billion in the previous year, and its earnings in the fourth fiscal quarter beat estimates.

When asked about the company's strategy for the consulting business in case of an economic downturn, Sweet said she expects Accenture's business model to remain resilient as client demand for Accenture's solutions is expected to increase during difficult economic times.