Acxiom to spin off or sell its traditional marketing division, realign into two core units

Acxiom Corp. says it will realign its business into two divisions, while spinning off in some fashion its traditional marketing division, the core business that has propelled Acxiom for decades in data management and direct mail.

“At Acxiom, our clients are our number one priority,” said Acxiom CEO Scott Howe. “Aligning our structure with the way clients buy our products and services makes it easier to explore a greater range of opportunities for delivering value. In addition, the structure better positions each business to address distinct market trends and execute against its respective opportunity set.”

Acxiom, headquartered in Conway, will create two distinct business units: LiveRamp and Acxiom Marketing Solutions. Those two units will center around data augmentation, people-based marketing, data management and strategies, and analytics services.

After a comprehensive review, Acxiom said it will explore options for its Marketing Solutions Business, which apparently includes some of its traditional data and direct mail business that has long been conducted in Arkansas.

“The company announced today that it intends to actively explore options to further strengthen Acxiom Marketing Solutions and deliver greater value to its clients. These options may include a strategic partnership, acquisition, tax-free merger, joint venture, tax-free spin-off, sale or other potential strategic combinations,” according to a company statement.

“Acxiom Marketing Solutions has long-standing relationships with many of the world’s biggest brands and currently serves nearly half of the Fortune 100,” said Howe. “Our associates are deeply committed to the long-term success of our clients, and our goal is to provide them with the ability to deliver even greater value at an accelerated pace.”

Acxiom said it does not intend to provide further public comments on its strategic review, “unless there is a material development.” No information was provided on how many Arkansas employees may be impacted by this realignment.

3Q EARNINGS REPORT
On the day Acxiom announced its realignment, it also reported its third quarter earnings.

Acxiom saw a strong improvement in third quarter earnings as the data marketing giant continues to align its operations with so-called people-based marketing that ties consumers to their smartphones and other smart devices.

For the period ended Dec. 31, Acxiom reported third quarter earnings of $22.9 million, or 28 cents per share, compared to year ago results of $1.07 million, or one cent per share. Revenues for the third quarter were $234.8 million, up from $223.3 million in the same period of 2016.

Wall Street had expected Acxiom to report third quarter earnings of 24 cents per share on revenue of $238.8 million, according to Thomson Reuters.

“We again delivered a solid quarter, led by the strong performance of our Connectivity division,” said Acxiom CEO Scott Howe. “While revenue in Audience Solutions was softer than expected, we continue to be pleased with our ongoing ability to generate meaningful cash flows in both Marketing Services and Audience Solutions. On a trailing-twelve month basis, these businesses have generated over $200 million in segment income.”

During the third quarter, Acxiom said its fast-growing LiveRamp division added over 50 new direct clients during the quarter and added several new partner integrations. Marketers can now onboard and activate their data across a growing network of more than 550 publishers and marketing technology providers, company officials said.

Acxiom also repurchased 729,000 shares for approximately $20 million during the quarter. Since the inception of the company stock buyback program in August 2011, Acxiom has repurchased 18.4 million shares for $325 million, with $75 million remaining under authorization.

Going forward, Acxiom said it now expects annual revenue for the fiscal year that ends March 30 of between $910 million and $915 million, an increase of nearly 6% year-over-year after adjusting for the Acxiom Impact divestiture. The new revenue forecast, however, is just below the company’s previous guidance of between $920 million and $930 million primarily due to lower-than-expected revenue from its Audience Solutions operations.

Acxiom now expects yearly earnings of between 19 cents and 23 cents per share, which includes a 28 cents per share boost from the recent corporate tax cut package approved by Congress in December.