Perhaps this will be the marketing services breakup of the year. Acxiom is selling its Marketing Solutions Business (AMS) The remaining business to be renamed LiveRamp which will eventually be sold. In essence the Acxiom Corporation is in the process of dissolving itself and to return the value to shareholders.
Acxiom® (Nasdaq: ACXM) announced that it has entered into a definitive agreement to sell its Acxiom Marketing Solutions business (AMS) to Interpublic Group (IPG), one of the world’s leading organizations of advertising agencies and marketing services companies, for $2.3 billion in cash. The transaction was unanimously approved by Acxiom’s Board of Directors and is expected to close by the end of calendar 2018.
Acxiom Corp.’s total worldwide revenue for year ended March 2018, including the portions it is not selling to IPG, was $917 million. IPG had $7.9 billion in global revenue for 2017, putting it $3 billion short of third-ranked Publicis Groupe, according to the Ad Age Datacenter.
IPG is buying the Acxiom Marketing Solutions business, which consists of Acxiom’s Marketing Services operation and lines of business from Acxiom’s Audience Solutions operation. Acxiom’s Marketing Services and Audience Solutions segments had worldwide revenue of $706 million in the year ended March 2018. Acxiom on Monday said LiveRamp had trailing 12-month revenue of $220 million.
Upon closing, the Company expects to realize approximately $1.7 billion in net cash proceeds, after taxes and fees. Consistent with its past capital allocation philosophy, Acxiom will continue its practice of executing a balanced approach to capital deployment. Specifically, the Company will continue to focus its capital on investing in growth opportunities and innovation, making strategic acquisitions and, at the same time, returning capital to shareholders.
Following the completion of the transaction, the Company intends to:
- Retire its existing $230 million debt balance, resulting in a debt-free balance sheet;
- Initiate a $500 million cash tender offer for its common stock;
- Increase its outstanding share repurchase authorization by up to $500 million, and extend the duration of the program to December 31, 2020;
- Use the remainder of the proceeds to fund its growth initiatives, strategic acquisition opportunities and meet its ongoing cash needs;
- Transfer the Acxiom brand name and associated trademarks to IPG; and
- Rename the Company LiveRamp and, shortly thereafter, begin trading its common stock under the new ticker symbol “RAMP”.
CEO Scott Howe and CFO Warren Jenson will remain in their current roles at the Company, which will be headquartered in San Francisco, California.
“This transaction is a great outcome for both Acxiom and our AMS business unit,” said CEO . “Acxiom Marketing Solutions is a strong business with deep expertise in data-driven marketing, talented associates and an exceptional client roster. After careful consideration of a variety of options and potential partners, it became clear that a sale of AMS to IPG, with its vast scale and breadth of complementary services, represented the best possible path forward for our clients and associates.”
“The successful completion of this transaction represents yet another milestone in the Company’s transformation,” added CFO Warren Jenson. “This deal returns significant capital to shareholders, and at the same time, allows us to invest in LiveRamp’s industry-leading capabilities, technology and market opportunities.”
Acxiom explored a wide range of strategic options to maximize the value of AMS and enable clients to benefit from a broader set of offerings. After conducting a thorough and competitive process, the Company considered multiple proposals and concluded that a sale of AMS to IPG is in the best interest of clients, associates and shareholders for the following reasons:
- The all-cash transaction unlocks immediate value for Acxiom shareholders and enables Acxiom to return capital through an accelerated and expanded ongoing share repurchase program;
- The Company gains greater financial flexibility to further fund its organic growth opportunities and potential acquisitions and partnerships; and
- The transaction marks the expansion of an already strong relationship that exists between IPG and LiveRamp.
The terms and conditions of the additional repurchase authorization are subject to Acxiom’s previously disclosed share repurchase program, which may be suspended, discontinued or resumed at any time.
“In a world where everything is becoming data-driven, Acxiom Marketing Solutions offers the deepest set of capabilities for helping companies navigate the complexity of creating personalized brand experiences across every consumer touchpoint,” said IPG Chairman and CEO Michael Roth. “The powerful combination of IPG and Acxiom Marketing Solutions is a game changer for the industry, and we believe it will drive meaningful value for both our clients and shareholders. Over the last year of working closely with AMS to power our AMP data platform, we’ve seen that our cultures are a great fit, and we are very excited to welcome them to IPG.”
The $2.3 billion all-cash transaction is subject to standard regulatory review, Acxiom shareholder approval and other customary closing conditions. In addition:
- As required regulatory approvals are being sought and received, Acxiom intends to solicit shareholder approval for the transaction;
- Once shareholder approval has been received and closing has occurred, the Company expects to report the results of the AMS segment as discontinued operations; and
- The transaction is expected to close in Acxiom’s third fiscal quarter, which ends December 31, 2018.
Evercore and Morgan Stanley are serving as financial advisors to Acxiom, and Wilson Sonsini Goodrich & Rosati is acting as legal advisor.
Acxiom provides the data foundation for the world’s best marketers. We enable people-based marketing everywhere through a simple, open approach to connecting systems and data that drives seamless customer experiences and higher ROI. A leader in identity and ethical data use for nearly 50 years, Acxiom helps thousands of clients and partners around the globe work together to create a world where all marketing is relevant. Acxiom is a registered trademark of Acxiom Corporation. For more information, visit Acxiom.com.
LiveRamp offers brands and the companies they work with identity resolution that is integrated throughout the digital ecosystem, providing the foundation for true omnichannel marketing. Our services transform the technology platforms used by our clients into people-based marketing channels that improve the relevancy of marketing and ultimately allow consumers to better connect with the brands and products they love.
LiveRamp is an Acxiom company located in the technology hub of San Francisco, delivering privacy-safe solutions to market and honoring the best practices of leading associations, including the Digital Advertising Alliance’s (DAA) ICON and App Choices programs, the Interactive Advertising Bureau, the Data & Marketing Association, and the Advertising Research Foundation.
Source: Acxiom Press Release and Press Commentaries