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story.lead_photo.caption 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. - Photo by Mitchell PE Masilun

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.

The deal, which isn't expected to close until the end of the year, will mark the end to Acxiom's 40-year presence in central Arkansas as a stand-alone company.

The Acxiom brand name will become part of the Interpublic Group portfolio, the company said in its announcement of the deal.

Previously known as CCX Network, the company took the name Acxiom in 1988, partly because investors confused it with CCX Inc., a New York-based tool steel and aluminum and fiberglass screening company.

When the sale closes, what is left of Acxiom will be called LiveRamp and its headquarters will be San Francisco, Scott Howe, chief executive officer for Acxiom, said in a news release.

LiveRamp, which Acxiom acquired in 2014 for $310 million, is a data onboarding company that transfers offline data to online applications for marketing purposes. LiveRamp can move data between most major marketing applications.

Analysts say LiveRamp is a fast-growing profitable business, has a dominant position within the industry and can become more attractive if its value can be unlocked as a stand-alone company.

In separate announcements, both Acxiom and Interpublic Group, or IPG, extolled what it called a "definite agreement" for Acxiom to sell its Acxiom Marketing Solutions business. The sale comes a few months after Acxiom, eager to divest itself of its staid but still lucrative segments, announced a strategic review of the company's assets. The sale of Acxiom Marketing Solutions was among the options.

A news report of an imminent deal sent Acxiom shares up about 14 percent Monday. The deal was announced after the market closed.

Acxiom Marketing Solutions represents about three fourths of Acxiom's annual revenue. It generated $697 million in the the company's 2018 fiscal year.

"This transaction is a great outcome for both Acxiom and our AMS business unit," Howe said in his company's announcement. "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."

In the announcement, 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.

The deal also "marks the expansion of an already strong relationship that exists between IPG and LiveRamp," Acxiom said.

"The deal returns significant capital to shareholders, and at the same time, allows us to invest in LiveRamp's industry-leading capabilities, technologies and market opportunities," said Warren Jenson, Acxiom's chief financial officer.

Interpublic Group, a global advertising giant hungry for a data company to help its advertising clients with targeted ads, was one of two global advertising holding companies that The Wall Street Journal reported last week had submitted bids to purchase Acxiom Marketing Solutions.

They and other advertising firms are under pressure to improve their digital marketing because consumer data have become an increasingly important tool in the ad-buying process, the Journal said. The digital marketing element has undercut the advertising firm's long-held strategy to use size and purchasing power to get the best prices for their clients.

Interpublic said the deal combines its media, creative, marketing services and analytics with what it called Acxiom Marketing Solutions' "unrivaled expertise in data management."

"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 Michael Roth, chairman and chief executive officer of Interpublic Group. "Combining AMS with a range of IPG assets will help us shape the future of our industry."

Acxiom Marketing Solutions includes all of Acxiom's data and data services. The unit has 2,100 employees, 1,600 data specialists; more than 2,000 clients; access to hundreds of marketing databases; recognizes 2.2 billion connected consumers, and manages more than 20 billion customer records.

"Its capabilities allow brand, media and technology partners to improve every customer interaction," Interpublic Group said.

John Battelle, an Acxiom board member, said in testimony before a U.S. Senate committee last month that data are becoming more valuable than currency.

Battelle is an entrepreneur, journalist, professor and author who has founded or co-founded scores of media businesses, including Wired magazine.

He was testifying about Facebook and its dealings with Cambridge Analytica, a third-party data broker that improperly collected personal information on 50 million users of the social media network.

The fallout affected Acxiom after Facebook discontinued its business arm, Facebook Partner Categories, which used data from Acxiom and other firms to target specific audience groups with advertising.

"Given that data is non-rivalrous and services such as Facebook are free of charge, it is often presumed there is no harm to consumers [or by extension, to society] in its use," Battelle told the Senate committee, according to a transcript he posted online. "This also applies to arguments about antitrust enforcement. I think our society will look back on this line of reasoning as deeply flawed once we evolve to an understanding of data as equal to -- or possibly even more valuable than -- monetary currency."

Acxiom shares rose $4.26, or 14.2 percent, to close Monday at $34.21 on the Nasdaq exchange after trading as high as $34.34 earlier in the day. The shares rose another 8 percent in after-hours trading.

Interpublic shares fell 41 cents to close at $23.03 in trading on the New York Stock Exchange.

A Section on 07/03/2018

Print Headline: Acxiom's marketing unit sells for $2.3B

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Comments

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  • arkateacher54
    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.

  • RBear
    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.
    ...
    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.

  • Whippersnapper
    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.
    .
    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.
    .
    "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

  • Libertarian
    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.

  • RBear
    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.

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

    BTW Whipper, thanks for the additional information.

  • Whippersnapper
    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.
    .
    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.
    .
    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.
    .
    That's why their calling it a win for the company, the shareholders, and the employees.

  • Whippersnapper
    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.
    .
    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
    .
    I can't believe I typed "their" instead of "they're" in my last comment. I apologize.
    .
    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.

  • MaxCady
    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.

  • JiminyC56
    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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