Accenture Acquires Marketing and Tech Agency Work & Co.

Carlyle Group in 2020 acquired a minority stake in the agency, whose clients have included Apple and Google

By: Patrick Coffee

Jan. 9, 2024 11:40 am ET

Accenture Song, the creative services division of consulting giant Accenture, has struck a deal to acquire Work & Co., a digital design and technology agency whose clients have included Apple, Google, Pfizer and the PGA Tour.

Terms of the deal, which Accenture expects to close this month, weren’t disclosed.

The acquisition will enhance Accenture’s ability to create digital products ranging from apps and chatbots to e-commerce platforms, said Accenture Song Chief Executive David Droga. Accenture, which holds some 25 patents for generative AI technology, was also impressed by the agency’s use of related tools in both its consumer-facing work and its internal operations, he said.

Brooklyn, N.Y.-based Work & Co. was established in 2013 to create stand-alone digital products for clients, but its remit expanded during the pandemic as online activity became a more important way for consumers to shop and interact with brands, said Mohan Ramaswamy, founding partner. Recent projects include a redesign of PepsiCo beverage brand Gatorade’s e-commerce site and Charley, a free chatbot designed to help people search for reproductive health services following the Supreme Court’s decision to overturn Roe v. Wade in 2022.

Work & Co. in recent years had become a target for deep-pocketed investors attracted to its client roster and its founders’ backgrounds in tech-focused marketing, said Michael Seidler, founder and CEO of capital and mergers and acquisitions advisory firm Madison Alley, which previously represented a private-equity firm that considered an investment in Work & Co.

“One of the key things is that they enable Accenture Song to connect with and service global CMOs by providing digital product design and sophisticated technical development at scale,” Seidler said.

Carlyle Group’s Europe Technology Partners investment fund and private-equity firm Copley Equity Partners acquired a minority stake in Work & Co. in 2020, with Copley owning a smaller share, according to people with knowledge of the situation. That deal was structured to allow Work & Co. employees to retain majority ownership, the people said. Third-party investments in Work & Co. haven’t been previously reported.

Work & Co. has itself acquired several digital development firms.

“Over the past few years, we’ve entertained a number of different offers. All those conversations didn’t really progress meaningfully enough, because it felt more transactional and less additive to where we are and where we want to go,” said Ramaswamy.

Accenture was a better fit because of its large size and expertise in the marketing and tech sectors, he said.

Work & Co. will become part of Accenture Song’s design and digital product practice, said Droga. Its principals eventually could take on new roles within the firm, he said.

Consulting firms for years have been investing in marketing services in an effort to expand their offerings for businesses.

Accenture raised its profile in the advertising business in 2019, when it acquired Droga’s ad agency Droga5. After he was promoted to CEO of Accenture’s marketing division in 2021, Droga restructured the organization by streamlining its marketing services into practice areas focused on traditional marketing, commerce, design and digital products, and service, which helps clients manage customer relationships.

He also rebranded the division, which had formerly been known as Accenture Interactive, as Accenture Song, and absorbed the individual brands of about 40 marketing businesses that previously had been acquired by Accenture.

Work & Co. will retain its own name for now, with the assumption that it eventually will merge into Accenture Song, said Droga.

Work & Co. employs just under 400 full-time staffers. About 30 are partners in the company, said Ramaswamy. The agency had $146 million in revenue in 2022, the last year for which it disclosed revenue.

Both Accenture and Work & Co. announced layoffs in early 2023 amid challenges to the digital advertising and consulting industries.

Accenture Song will continue to seek potential acquisitions, which over the past two years has primarily consisted of buying data and e-commerce providers, said Droga.

“It is a buyer’s market. That doesn’t mean we want to go out and buy stuff because people are selling,” he said.