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Acxiom Corp. Sells IT Business for $190M, Previews 4Q Earnings

3 min read

Acxiom Corp. of Little Rock on Wednesday said it has entered into an agreement to sell its IT Infrastructure Management business for “total cash consideration of up to $190 million” to two private equity firms.

The buyers are Charlesbank Capital Partners of Boston and New York and M/C Partners, which has offices in Boston and San Francisco.

Acxiom CEO Scott Howe said in a news release that the sale highlights the company’s shift away from information technology services in recent years.

“In the last three years, we have taken a number of steps to tighten our strategic direction,” Howe said. “This transaction represents the next phase in our journey to focus Acxiom on growing its core Marketing and Data Services business, and extending its leadership in onboarding and connectivity.”

Acxiom said in a news release that the total potential cash consideration from the deal, which is expected to close by the second quarter of 2016, is about $190 million, with $140 million at closing and up to $50 million in payments contingent upon “certain performance metrics” that were not disclosed.

Acxiom will also receive “a five percent profits interest” in the company. It said it plans to use funds from to sale to pay down debt and expand its share repurchase program.

“We are excited about the future of Acxiom IT under the new ownership group. Their deep expertise, substantial capital base and commitment to IT outsourcing will give Acxiom IT a strong platform for growth and enhance its ability to deliver innovative solutions to its customers,” Howe said. “Charlesbank and M/C Partners are gaining a deeply talented team that I am confident will flourish under their direction.”

In a fact sheet released along with the news release on the sale, the company said “Acxiom client contracts, engagements, and projects should not be affected, and our associates will continue to support clients and their business without interruption.”

“The transition of Acxiom ITO to its new owners will be seamless and clients will continue to receive the same high quality work and commitment to which they are accustomed,” the company said. “While there may be a small number of associates who move buildings, by and large, associates will still go to the same place to work.”

Ines Gutzmer, Acxiom’s director of communications, said the company will retain ownership of data centers in Little Rock, Conway and Leeds in the United Kingdom.

Lydia Jett, a vice president at M/C Partners, said in an email that, “We have been very impressed by the quality of the employees at Acxiom IT and will be looking to increase headcount to support the growth of the business going forward. We hope current employees will be as excited as we are about the increased opportunity that will come from that growth.”

Ryan Carroll, a managing director at Charlesbank, said in the Acxiom news release that, “We are excited about the opportunity to work with Acxiom and our partner, M/C/ Partners, to provide the financial and operational resources to facilitate Acxiom IT’s growth and continues success.”

A spokesman for Charlesbank declined to comment further until the deal closes.

4Q Earnings Peek

The company also released its preliminary fourth-quarter and full-year financial results on Wednesday.

Acxiom reported a net loss per diluted share of 8 cents compared to a net loss of 33 cents per diluted share the year before. Total revenue from continuing operations reached $257 million in the fourth quarter of fiscal 2015 compared to $269 million the year before.

For the full year, the company reported a net loss of 12 cents per diluted share in fiscal 2015 compared to a net loss of 14 cents per diluted share the year before. Total revenue from continuing operations were $1.02 billion compared to $1.062 billion in fiscal 2014.

Acxiom will hold a conference call to discuss the earnings report with analysts at 4 p.m. Thursday.

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