SUNDAY, JULY 8, 2018 Exec: Acxiom won’t vanish
Conway campus will still be hub after transaction closes
To hear Jerry Jones tell it, people won’t notice much difference in Acxiom’s presence in central Arkansas after the close of a $2.3 billion deal to sell three-fourths of the company to global advertising holding company Interpublic Group.
Jones, an 18-year veteran of Acxiom, is the company’s chief ethics and legal officer and executive vice president. He will continue with LiveRamp, the new name for what will remain of Acxiom after the transaction is completed later this year. LiveRamp was a company Acxiom acquired for $310 million in 2014.
He said the division that Interpublic Group is acquiring, Acxiom Marketing Solutions, which specializes in crunching data on 2 billion consumers, will operate “much in the same way it has operated.”
“The people in Conway are going to be on the Conway campus,” Jones said.
Acxiom Marketing Solutions employs 2,100 people worldwide, including 1,500 in central Arkansas, Interpublic Group said in its announcement.
The news brought relief, at least for now from City Hall to the state Capitol.
“They are one of our largest employers and a very important asset to the city of Conway,” said Bart Castleberry, mayor of the Faulkner County city of more than 65,000 residents.
“In conversations with Acxiom leadership, it’s our understanding that they do intend to keep their personnel here, and that’s a tribute to our workforce,” Gov. Asa Hutchinson said in a statement. “I intend to have more discussions as time goes on, but we’re hopeful that the new business model of LiveRamp
will continue to have a strong employment presence in Arkansas.” The governor expressed disappointment that LiveRamp won’t be based in Arkansas, but said it wasn’t unexpected. “It does not come as a surprise since the CEO has been operating out of San Francisco for a number of years,” Hutchinson said. Jones also said he doesn’t anticipate much change in the size of the LiveRamp employee population in central Arkansas. Though LiveRamp will be based in San Francisco, Jones said he will be among its workforce remaining in Arkansas. A count of LiveRamp workforce wasn’t immediately available last week. “I don’t think there will be much significant change in terms of the number of people that work for those two businesses that were combined but now are separate,” Jones said. “The total population of employees will be approximately the same.” Even the Acxiom name will remain as a division of Interpublic Group, Jones said. “I don’t think the name of Acxiom is going to disappear off of buildings or billboards or wherever else it might appear,” he said. It has been an unsettled time in recent years for Acxiom employees, some of whom thought some kind of deal was coming, particularly with the sale of the company’s headquarters office tower in Little Rock two years ago. Acxiom held a global town hall-style meeting with its workforce on Tuesday, the day after the deal was announced. Interpublic Group executives also held an announcement call earlier the same day. Employees, having time to have absorb the news, are starting to “see the compelling business reasons” to combine Acxiom Marketing Solutions with Interpublic Group, and “they see significant opportunities to grow [Acxiom Marketing Solutions] much faster than it’s already been growing because of the extensive reach of [Interpublic Group] around the world,” Jones said. “Really, the only thing would be, there is a lot of unknown for many of the shared services associates, [such as] accounting, marketing and [human resources],” said one employee who asked not be identified.
‘VERY GOOD FIT’
In an interview last week with the Arkansas DemocratGazette, Jones reiterated how all parties involved in the deal — shareholders, clients and employees — will benefit from the deal. “From a business perspective, putting [Acxiom Marketing Solutions] and [Interpublic Group] together creates a really strong business for datadriven marketing solutions, bringing together great people with great opportunities,” he said. Acxiom Marketing Solutions is strong in areas where Interpublic Group was not as strong and vice versa, he said. “There’s a very, very good fit in that respect.” The deal also creates more opportunities for Acxiom Marketing Solutions to grow its business, Jones said. “For our associates, they’re joining a global company that already has 50,000 employees working for it,” he said. “They operate, I believe, in 100 countries and they have a very broad reach across the marketing spectrum. It gives that business a degree of scale that we anticipate will be effectively utilized.” Interpublic Group paid a premium for Acxiom Marketing Solutions, analysts said. “We think this is a remarkable price … for a business that has had some growth challenges, customer losses, contract delays and regulatory headwinds,” Brett Huff, an analyst with Stephens Inc., said in a research note. Stephens has had a business relationship with Acxiom. “Interpublic saw value in the data,” said Lawrence Berlin, who follows Acxiom as a senior vice president for First Analysis in Chicago. “It’s a very competitive market. Ad agencies, specifically, are having a tough time. This gets them their competitiveness so I think they were willing to pay for that.” As for Acxiom Marketing Solutions, employees “seem happy” that Interpublic “has made a commitment to them,” he said.
LIVERAMP UNLEASHED
The deal also will free up money for LiveRamp “to continue innovation,” Jones said. LiveRamp already had a business relationship with Interpublic, which will continue, he said. LiveRamp gets “unchained,” Berlin said. “They are a growth entity and hopefully they get to build on that growth potential.” Jones said company executives recognized that the company needed to be divided in order to continue to prosper. “The way that the market values these two businesses is separate, and by being able to separate the businesses the way that we did we felt it was the best way to provide value back to our shareholders, provide great opportunities for both sets of people within those businesses and to continue to serve the client sets,” he said. That ongoing relationship between Acxiom’s LiveRamp unit and Interpublic Group certainly didn’t hurt in bringing the two companies together. “It always helps when parties that are interested in doing a transaction have some degree of history,” Jones said. “It provides comfort in being able to understand the business, and it provides a level of trust because you have a history with each other. How that gets weighed, who knows? Is it a positive? Certainly.”
SHAREHOLDERS TO BENEFIT
The company said shareholders will benefit from the transaction. “We intend to return up to a billion dollars in capital back to our shareholders,” Jones said. That includes a $500 million tender for shares the company intends to begin shortly after the deal closes and add another $500 million to the company’s share repurchasing program. “Much risk [for shareholders] has been taken off the table in this deal,” Berlin said. “These businesses have had bad quarters and bad years. They don’t have to worry about that anymore.” And any risk of integrating operations will sit with Interpublic Group, Berlin said. Even before deal with Interpublic Group was announced, speculation in the industry suggested LiveRamp was being positioned for acquisition. Huff said in his research note that the “nice [Acxiom Marketing Solutions] valuation gives us confidence” that company executives “will max LiveRamp value” either as a public company or as one to be sold to another company. Huff included Oracle among the potential suitors. Such talk is premature, Jones said. “What I can tell you is when the transaction closes later this year, LiveRamp will be an independent public company,” he said. “As a public company, people buy and sell our shares every single day. We will run that business with the full intention of it being an independent public company. But as Scott Howe, our CEO, has said repeatedly, as a public company, we have fiduciary duties to our shareholders, and if someone expresses significant interest, we’ll see. “But no one can predict the future on these things. No one can. The way to run the business is to run it every day as if you’re always going to own the business.” Still, assuming the deal is closed by the end of the year, Acxiom will no longer be a publicly traded Arkansasbased company. Acxiom got its start in Conway nearly 50 years ago and has been officially known by that name since 1988, the year it went public. “Acxiom has benefited from being able to grow up within the state of Arkansas, to grow up primarily in Conway,” Jones said. “We have benefited from an exceptionally professional and good and loyal group of people who built this business over decades, who have phenomenal relationships with our clients. “It has moved around the globe as a result of the strength that was first developed here.”