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Wednesday, July 18, 2018, 1:54 a.m.

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Central Arkansas-based Acxiom's marketing unit sells for $2.3B

By Noel Oman

This article was originally published July 3, 2018 at 4:30 a.m. Updated July 3, 2018 at 4:48 p.m.

acxiom-president-and-chief-executive-officer-scott-howe-left-and-marc-haynes-vice-president-of-acxiom-workplace-experience-view-the-inside-of-an-acxiom-office-building-in-conway-in-this-2017-file-photo

Acxiom President and Chief Executive Officer Scott Howe (left) and Marc Haynes, vice president of Acxiom workplace experience, view the inside of an Acxiom office building in Conway in this 2017 file photo.

Conway-based Acxiom Corp. on Monday announced a $2.3 billion cash deal to sell its major business line to Interpublic Group, a global advertising giant based in New York.

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arkateacher54 says... July 3, 2018 at 7:04 a.m.

I never knew what Axciom did, good ole Arkansas company, so I looked it up. They sell our "private" information to advertisers. Sons a beeches.

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RBear says... July 3, 2018 at 7:48 a.m.

This will create a challenge for Arkansas technology. Reading more about IPG's current technology approach, they have an existing infrastructure. The question will be how much of Axciom's assets will remain and how many will be assimilated into the IPG stack. Last year, IPG promoted Arun Kumar to their head of marketing technology. He has been instrumental in building out a strong marketing platform and infrastructure.
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My guess is Axciom will be pared down with some of the operations and development staff remaining in Conway. IPG can't beat the COL in Arkansas for talent and there is some good talent in Conway. Their toolsets integrate with Axciom's platform so that could be a good sign. We'll see what happens.

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Whippersnapper says... July 3, 2018 at 8:32 a.m.

Several press releases indicate that Acxiom will be a separate division in IPG that will mostly build its data products to be used/consumed by other IPG divisions. This is similar to what Acxiom does today.
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The employees should be fine. One of the things IPG said in their press release was that they were happy to get 2,000+ new employees with highly sought after data knowledge and skills.
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"Combining AMS with a range of IPG assets will help us shape the future of our industry. Acxiom's leadership on data ethics is second to none, its business is solid and growing, and it has long played a foundational role in the marketing ecosystem. The company also boasts 2,100 associates with data and analytics skills that are at a premium in business today."
(from the IPG press release here)
investors. interpublic. com/news-releases/news-release-details/interpublic-group-agrees-acquire-acxiom-marketing-solutions-ams

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Libertarian says... July 3, 2018 at 8:36 a.m.

Acxiom said the deal "unlocks immediate value for Acxiom shareholders and enables Acxiom to return capital through an accelerated and expanded ongoing share repurchase program" and gives the company greater financial flexibility to expand or acquire other companies.

How do you return capital if you turn around and buy back stocks with it? If you spend your money on stock buy backs, what does that leave for other companies?

Sounds more like a quick payday for the officers.

Reminds me of Alltel. Officers bragging what a great deal it was (for them) when everyone else got a pink slip.

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RBear says... July 3, 2018 at 9:01 a.m.

Whipper I hope that’s the case. The talent is there and IPG can really put it to work. It brings in some more focus to their mission as well.

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RBear says... July 3, 2018 at 9:10 a.m.

BTW Whipper, thanks for the additional information.

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Whippersnapper says... July 3, 2018 at 9:23 a.m.

Libertarian,
The Acxiom press release for their investors explained that they were going to spend $500 Million buying Acxiom stock back and an additional $500 million offering a tendered (specific price) buyback to shareholders. This lets current shareholders sell their stock back, increases demand for shares, and reduces the overall number of shares. All of those are good for shareholders.
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So, there are 77 million shares outstanding with a total value of about $2.5 Billion. The investment community thinks that after this sale, the market capitalization of the remainder (LiveRamp) should be $2-3 Billion. If their stock repurchases take 25 million shares off the market (average price of $40 for that to happen - the stock was trading in the 20s before this purchase discussion), there would then be 52 million shares that would account for market capitalization of $2-3 billion, which would mean share prices of $40-$50.
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So, current stockholders are already sitting pretty with gains of 35% or so over the past couple of weeks and 100% or so since March. Future shareholders are sitting pretty with potential additional gains of $10 or more per share. Overall, this is one of those where the shareholders will win and the senior leaders (most of whom have hundreds of thousands or millions of shares of stock) will win as well. Their 401(k) match has been in Acxiom stock for years, so many of their employees will win.
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That's why their calling it a win for the company, the shareholders, and the employees.

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Whippersnapper says... July 3, 2018 at 9:34 a.m.

Here's the Acxiom investor press release talking about how they are doing the billion dollar in purchases of their own stock (which drives up the price through both increased demand and reduction in shares outstanding) and is good for the shareholders.
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investors.acxiom. com/news-and-events/press-release-details/2018/Acxiom-Enters-Into-Definitive-Agreement-to-Sell-Acxiom-Marketing-Solutions-for-23-Billion-to-Interpublic-Group/default.aspx
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I can't believe I typed "their" instead of "they're" in my last comment. I apologize.
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Acxiom was trading for $18.60 a share in intraday trading on March 29th after the Facebook and Cambridge Analytics thing made everybody worry about them. They have already surpassed $39 per share in intraday trading today (and were over $40 yesterday in after hours trading), so to say this has been good for the shareholders is an understatement.

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MaxCady says... July 3, 2018 at 10:40 a.m.

The Axciom name is probably no more. Hopefully all the good people that have dedicated their lives to that place won't have to live under the constant threat of being laid off now that IPG is the new owner.

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JiminyC56 says... July 3, 2018 at 11:40 a.m.

I knew something was going on when they sold their Little Rock building to Simmons.

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