Global management consulting firm Accenture plc ACN recently announced that Amadeus, a leading global distribution system ("GDS"), will acquire Navitaire— a wholly-owned subsidiary of Accenture —for $830 million. Under the terms of the agreement, roughly 550 Navitaire employees will be transferred to Amadeus.
Navitaire offers technological and business solutions to the airline, high-speed rail and bus industries. The company mainly focuses on revenue generation and streamlining costs in the fields of reservations, ancillary sales, loyalty, revenue management, revenue accounting and business intelligence. Operating through offices in North America, Europe, Asia and Australia, Navitaire provides industry-leading technology services to more than 50 airlines and rail companies worldwide.
A Mutually Beneficial Relationship
Technology has changed the way people do business and consequently, there is scope for increasing efficiencies and lowering costs by automating and streamlining routine functions. Navitaire’s technologies will enable Amadeus in differentiating its services and creating tailored up-sell and cross-sell opportunities. This in turn will drive revenues and profitability while also improving customer experience.
Navitaire will also help Amadeus expand its footprint to the low-cost airline market, particularly in Asia.
Accenture simultaneously entered into a partnership with Amadeus, to provide airlines with outsourced IT services that will generate additional revenue for the company.
Customers Are The Ultimate Winners
The Accenture and Amadeus alliance will offer consumers a more flawless travel experience. The partnership merges Amadeus’ and Navitaire’s technologies with Accenture’s aviation know-how and worldwide ability in technology, analytics, cloud, mobility and operations.
As stated by David P. Evans, Navitaire CEO, “Today’s announcement marks a new chapter for Navitaire that will enable us to accelerate and deepen our industry offerings. Our customers will benefit from greater access to Amadeus’ industry solutions to help support their growth and link with traditional industry partners. At the same time, they will continue to benefit from Accenture’s expertise and capabilities as a result of the Accenture-Amadeus alliance.”
Summing Up
The overall travel market is robust and evolving very rapidly. We believe that these alliances and acquisitions will help Accenture grow in the future and deliver above market growth rates even in the presence of increasing competition from companies like International Business Machines Corporation IBM and Cognizant Technology Solutions CTSH.
Accenture has a Zacks Rank #2 (Buy). Investors may also consider Mobileye N.V. MBLY, which sports a Zacks Rank #1 (Strong Buy).
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