Former Acxiom subsidiaries now headed in different directions

Going on 2-1/2 months after selling off its legacy data marketing business for $2.3 billion to New York-based Interpublic Group (IPG), the former Acxiom Corp. has quickly regrouped with a new West Coast identity and San Francisco-based executive team more befitting a Silicon Valley tech firm.

After Acxiom shareholders overwhelmingly approved the sale of its Acxiom Marketing Solutions (AMS) business to IPG at the Arkansas tech firm’s annual shareholder meeting in Conway on Sept. 20, the company’s board of directors and executive team moved swiftly to close the deal 10 days later and have now emerged with a new name and direction.

“LiveRamp is a category creator. Our industry-leading platform is changing the world for our customers and their consumers. As an independent company, LiveRamp will focus on its vision of creating a world where connected data makes every experience exceptional,” Company CEO Scott Howe said after officials transferred the Acxiom brand to IPG and changed its name to LiveRamp Holdings, Inc. on. Oct. 1.

LIVERAMP TRANSITION
After separating from its Arkansas roots and moving the company’s home office to San Francisco, LiveRamp said it is now in a “transition period” as it enters its next phase of growth that included terminating or modifying all compensation plans and benefits programs related to the former Acxiom Corp.

Lauren Dillard, the company’s investor relations spokeswoman, told Talk Business & Politics that the San Francisco-based digital marketing firm expects the ongoing transition period to extend through the first quarter of next year. “As we discussed in our Oct. 29 release and our Analyst Day, we expect this transition period to extend through our fiscal year 2019 – which ends March 31, 2019,” Dillard said of LiveRamp’s back-ended fiscal year.

Despite the move to Silicon Valley, Dillard said the former Arkansas-based company still maintains part of its roots in the Natural State with roughly 50 employees remaining here. The company’s other 700 employees are spread out in 12 locations across the U.S., including the corporate offices in San Francisco.

LiveRamp’s executive team and nine-person board also retained some Arkansas ties with Dillard’s Chairman and CEO William Dillard II staying on as one of the directors. Jerry Jones, the longtime Little Rock native and legal counsel for Acxiom Corp., will also serve as an executive vice president and chief ethics and legal officer for the West Coast tech firm.

Howe, who was hired to take over as Acxiom’s CEO in 2011, was known to have kept residences in Arkansas and on the West Coast, where he formerly worked for Microsoft Corp. He and his leadership team, however, have spent the past several weeks on the East Coast convincing analysts, investors, shareholders and institutional stockholders that LiveRamp will be able to thrive and compete in the fast-growing people-based digital marketing space that connects consumers, data, smartphones and other devices.

To endear itself with Wall Street, Howe and his leadership team recently rang the opening bell on the New York Stock Exchange on Oct. 29, nearly one month after re-emerging as a standalone publicly traded concern relisted under the “RAMP” stock symbol. That same day, LiveRamp also hosted the company’s first-ever analyst and investor summit to offer Wall Street analysts a closer look at the company’s go-to-market strategy and overview of the company’s finances.

Since then, LiveRamp’s board of directors has moved forward to bolster the company’s common stock through a so-called a “modified Dutch auction” tender offer to purchase up to $500 million shares at a price not greater than $49 per share. A Dutch public offering is different from an initial public offering (IPO) because it allows LiveRamp to repurchase shares at a set price range within a short amount of time.

Last week, LiveRamp extended the offering through Dec. 13 after it said nearly 4,255 shares had been tendered in the offering. Still, the former Arkansas tech company has some work to do to grow its business after selling off its traditional Acxiom marketing business, which contributed more than two-thirds of the company’s annual revenues.

In its second quarter earnings report, on the same day the company’s executive team met with Wall Street analysts and investors, LiveRamp reported a net loss of $41 million or 53 cents per share on total revenue of just $65 million. On a yearly basis, LiveRamp expects to see continuing losses from operations between $52 and $65 million on revenues of $275 million to $285 million in fiscal 2019.

“LiveRamp is a best-in-class SaaS company with a terrific business model. We’ve demonstrated strong top-line growth, product expansion and an ability to significantly improve margins. The Company will also have an exceptional balance sheet,” said CFO Warren Jenson. “We enter the next phase of our journey in a position of strength and with a focus on delivering even greater value to our customers and shareholders.”

“Now that the sale of AMS is behind us, the collective energy of our team is one hundred percent focused on LiveRamp and our opportunity,” Jenson said of the company’s challenge.

ACXIOM’S LEGACY BUSINESS FOLDED INTO NEW YORK-BASED IPG
Meanwhile, IPG has also moved forward with integrating the former AMS division into its operations. Following the close of its $2.3 billion deal with LiveRamp on Oct. 1, IPG said the former Acxiom unit will operate as a standalone division within the New York-based company, which owns such global brands as Craft, Campbell Ewald, Octagon, The Martin Agency and MAGNA.

In a recent 10Q quarterly filing with the federal Securities and Exchange Commission (SEC), IPG said it has completed the offering of $2 billion in senior notes to finance the Acxiom acquisition along with a $500 million loan arrangement from third-party lenders. Company officials expect the acquisition to provide significant financial benefits, including an acceleration in incremental revenue and earnings opportunities.

Overall, the former Acxiom division represents nearly 8% of combined IPG revenues, company officials said, but also diversifies IPG’s sales base and provides new revenue streams. The AMS business will also remain headquartered in Conway, reporting to Arun Kumar, chief data and marketing technology officer for the New York-based advertising and marketing giant.

“With the completion of the Acxiom acquisition, we have a strengthened position to help clients succeed in a world where data-driven marketing solutions are increasingly core to brands’ success. We also feel that we remain positioned to achieve our previously stated goal of net revenue organic growth of 4.0% to 4.5% and margin expansion of 60 to 70 basis points,” IPG Chairman and CEO Michael Roth said after the company’s third quarter earnings report on Oct. 19.

“Combined with our commitment to deleverage our balance sheet and our strong history of capital return programs, including dividend increases, this will allow us to further enhance shareholder value,” added Roth.

Besides expected revenue growth from the Acxiom deal, IPG has not yet revealed any future savings, reorganizations or possible downsizings related to the advertising and marketing giant’s Arkansas business unit. IPG added more than 2,100 employees from the Acxiom deal to its global workforce of more than 50,000. Nearly 1,400 of those jobs in Arkansas are located mostly in Little Rock and Conway.

In the third quarter, IPG reported net income of $161 million or 41 cents per share on revenue of $1.9 billion. Company officials did not respond to Talk Business & Politics inquiries concerning the future of IPG’s operations in Arkansas.