Accenture (NYSE: ACN) has agreed to acquire umlaut, an engineering consulting and services firm headquartered in Aachen, Germany. The move will significantly scale Accenture’s deep engineering capabilities to help companies use digital technologies like cloud, artificial intelligence, and 5G to transform how they design, engineer and manufacture their products as well as embed sustainability.
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Accenture is acquiring engineering consulting and services firm umlaut to expand its Industry X services (Graphic: Business Wire)
The acquisition of umlaut will add more than 4,200 industry-leading engineers and consultants across 17 countries to Accenture’s Industry X services, and expand the company’s capabilities across a range of industries, including automotive, aerospace & defense, telecommunications, energy and utilities. Industry X combines Accenture’s powerful data and digital capabilities with deep engineering expertise to offer clients the broadest suite of services for digitizing their engineering functions, factory floors and plant operations, improving productivity, speeding up the transformation of hardware into software-enabled products, and allowing for faster and more flexible product development.
“We predicted that digital would ultimately be applied at scale to the core of a company’s business – the design, engineering and manufacturing of their products. And, for nearly a decade Accenture has been building the unique capabilities and ecosystem partnerships to combine the power of digital with traditional engineering services,” said Julie Sweet, chief executive officer, Accenture. “COVID-19 has accelerated the need for companies to transform these core operations, and umlaut’s leading and highly-specialized engineering services will enhance our ability to meet the accelerating demand and also continue innovating for our clients.”
Accenture is expanding Industry X at a time when software increasingly determines the market success of platforms, products and services across industries that require intelligence to be embedded. However, in a survey of more than 1,500 industry executives, Accenture research found that only 38% of companies have deployed at least one project to digitize their engineering and manufacturing.(1)
“Bringing world-class digital engineering and manufacturing expertise to our clients helps them rapidly scale, accelerate growth, improve productivity and safety, and embed sustainability across their operations,” said Nigel Stacey, global lead of Accenture Industry X. “From consumers to R&D to the supply chain and factory floor, and back again, companies that use the power of data and digital to build value will become — and remain — relevant, resilient and responsible.”
The COVID-19 pandemic has shown that most companies’ operations and supply chains are far from resilient or flexible enough to respond to crises. Digital technologies can help mitigate disruptions by, for example, enabling a fast switch to operate factories remotely or providing near real-time insights about changing market demands. In addition, companies are increasingly expected to operate more responsibly and contribute to a circular economy through the development of more sustainable products.
Umlaut’s capabilities span traditional and digital engineering services; testing and validation of smart connected products; strategy, process and organizational consulting; and hardware product development as well as software development.
“Business leaders across many industries who face the convergence of the digital and the product world are looking for a trusted partner that understands their language and can really help navigate each step of the journey to bring tangible outcomes in engineering and manufacturing,” said Marc Peter Althoff, chief technology officer, umlaut. “We are excited to bring our unique engineering and consulting culture, deep industry know-how and subject matter expertise to Accenture Industry X and jointly create the capabilities and scale to help clients successfully transform.”
Umlaut will be next in a series of 22 acquisitions Accenture has made since 2017 to build its Industry X capabilities. More recent acquisitions include operations technology provider Electro 80 (Australia), industrial robotics and automation services provider Pollux (Brazil), operations consultancy Myrtle (US) and technology consultancy SALT Solutions (Germany).
Completion of the acquisition is subject to customary closing conditions. Financial terms of the acquisition were not disclosed.
Accenture is a global professional services company with leading capabilities in digital, cloud and security. Combining unmatched experience and specialized skills across more than 40 industries, we offer Strategy and Consulting, Interactive, Technology and Operations services—all powered by the world’s largest network of Advanced Technology and Intelligent Operations centers. Our 537,000 people deliver on the promise of technology and human ingenuity, serving clients in more than 120 countries. We embrace the power of change to create value and shared success for our clients, people, shareholders, partners and communities. Visit us at www.accenture.com.
Accenture Industry X embeds intelligence in how clients run factories and plants, as well as design and engineer connected products and services—making manufacturing and operations more efficient, effective and safe; enabling companies to transform how they make things, and the things they make, for sustainable growth.
Umlaut is a global, full-service, cross-industry, end-to-end company that offers advisory and engineering services to clients all over the world. In-depth domain expertise, broad practical knowledge and interdisciplinary collaboration allow them to add value, quality and focus to their clients’ organizations, services and products, in disruptive times in which industries are increasingly converging.
Within an able and agile collective of 20 consultancies and engineering firms spread across 50 locations all over the world, 4,200 specialized experts and engineers provide innovative solutions and transformations across all industries and their various intersections as well as serving the public sector and developing organizational cultures, structures and processes. For more information please visit: umlaut.com.
Except for the historical information and discussions contained herein, statements in this news release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “will,” “should,” “likely,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “positioned,” “outlook” and similar expressions are used to identify these forward-looking statements. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied. Many of the following risks, uncertainties and other factors identified below are, and will be, amplified by the COVID-19 pandemic. These risks include, without limitation, risks that: Accenture and umlaut will not be able to close the transaction in the time period anticipated, or at all, which is dependent on the parties’ ability to satisfy certain closing conditions; the transaction might not achieve the anticipated benefits for Accenture; Accenture’s results of operations have been significantly adversely affected and could in the future be materially adversely impacted by the COVID-19 pandemic; Accenture’s results of operations have been, and may in the future be, adversely affected by volatile, negative or uncertain economic and political conditions and the effects of these conditions on the company’s clients’ businesses and levels of business activity; Accenture’s business depends on generating and maintaining ongoing, profitable client demand for the company’s services and solutions including through the adaptation and expansion of its services and solutions in response to ongoing changes in technology and offerings, and a significant reduction in such demand or an inability to respond to the evolving technological environment could materially affect the company’s results of operations; if Accenture is unable to keep its supply of skills and resources in balance with client demand around the world and attract and retain professionals with strong leadership skills, the company’s business, the utilization rate of the company’s professionals and the company’s results of operations may be materially adversely affected; Accenture could face legal, reputational and financial risks if the company fails to protect client and/or company data from security incidents or cyberattacks; the markets in which Accenture operates are highly competitive, and Accenture might not be able to compete effectively; Accenture’s profitability could materially suffer if the company is unable to obtain favorable pricing for its services and solutions, if the company is unable to remain competitive, if its cost-management strategies are unsuccessful or if it experiences delivery inefficiencies or fail to satisfy certain agreed-upon targets or specific service levels; changes in Accenture’s level of taxes, as well as audits, investigations and tax proceedings, or changes in tax laws or in their interpretation or enforcement, could have a material adverse effect on the company’s effective tax rate, results of operations, cash flows and financial condition; Accenture’s ability to attract and retain business and employees may depend on its reputation in the marketplace; as a result of Accenture’s geographically diverse operations and its growth strategy to continue to expand in its key markets around the world, the company is more susceptible to certain risks; Accenture’s business could be materially adversely affected if the company incurs legal liability; Accenture’s work with government clients exposes the company to additional risks inherent in the government contracting environment; Accenture’s results of operations could be materially adversely affected by fluctuations in foreign currency exchange rates; if Accenture is unable to manage the organizational challenges associated with its size, the company might be unable to achieve its business objectives; if Accenture does not successfully manage and develop its relationships with key alliance partners or fails to anticipate and establish new alliances in new technologies, the company’s results of operations could be adversely affected; Accenture might not be successful at acquiring, investing in or integrating businesses, entering into joint ventures or divesting businesses; if Accenture is unable to protect or enforce its intellectual property rights or if Accenture’s services or solutions infringe upon the intellectual property rights of others or the company loses its ability to utilize the intellectual property of others, its business could be adversely affected; Accenture’s results of operations and share price could be adversely affected if it is unable to maintain effective internal controls; changes to accounting standards or in the estimates and assumptions Accenture makes in connection with the preparation of its consolidated financial statements could adversely affect its financial results; Accenture might be unable to access additional capital on favorable terms or at all and if the company raises equity capital, it may dilute its shareholders’ ownership interest in the company; Accenture may be subject to criticism and negative publicity related to its incorporation in Ireland; as well as the risks, uncertainties and other factors discussed under the “Risk Factors” heading in Accenture plc’s most recent Annual Report on Form 10-K and other documents filed with or furnished to the Securities and Exchange Commission. Statements in this news release speak only as of the date they were made, and Accenture undertakes no duty to update any forward-looking statements made in this news release or to conform such statements to actual results or changes in Accenture’s expectations.
(1) Accenture Research IX survey 2020