Posted 10/1/2007 08:01 am
Updated 11 months ago
(More on this story here from Arkansas Business and KTHV. Includes THVideo.)
Charles Morgan, Acxiom's leader for 35 years, said Monday that he will retire and that the company has terminated a $3 billion deal to be bought out and go private.
Acxiom said it reached an agreement with prospective buyers Silver Lake and ValueAct Capital to terminate the deal, and that the private equity firms will pay Acxiom $65 million in cash to terminate the merger agreement.
Terms of the termination agreement are available in an 8-K filing with the U.S. Securities and Exchange Commission here. The agreement says ValueAct and Silver Lake will each pay half of the $65 million break-up fee, which had been negotiated down from a $110 million penalty included in the original terms of the deal.
In a separate announcement, Morgan said he will retire after the company finds a successor. It appears that Morgan will remain as board chairman.
"I had been considering stepping down as the leader of Acxiom and thought the completion of our going-private transaction would be the natural time to begin an orderly transition," Morgan said. "As Acxiom will now remain public it is the right time for a change. While I had been planning to retire from Acxiom, I have agreed to stay as Company Leader during this interim period."
Morgan's decision to retire contrasts with previous statement he made about remaining with the company once the buyout was complete. When Acxiom announced the sell-out plan in May, Morgan said it was his desire to remain CEO. Morgan said he believed Acxiom's prospective owners wanted him to stay.
The data services firm said its board of directors has created a search committee for a new leader. That committee is made up of Halsey Wise, Thomas F. "Mack" McLarty, Ann Die Hasselmo and Morgan. The search will include both internal and external candidates, the company said.
"We are working toward an ongoing role for Charles, recognizing that much of the success of the company is attributable to his leadership, technological vision and his direct relationship with many of the clients of the company," said William T. Dillard II, described as Acxiom's "lead director."
Dillard, CEO of Dillard's Inc. of Little Rock, led the Acxiom board committee that fashioned the sell-out plan.
Louis J. Andreozzi, who at one time was being groomed by ValueAct to take over Morgan's job, told ArkansasBusiness.com on Monday that he was no longer seeking the position.
"I'm doing something else now, so unless someone else approaches me, it's not on my radar screen," said the former president and CEO of LexisNexis' North American legal market business
In 2005, while ValueAct was pursuing a hostile takeover of Acxiom, Andreozzi was being paid $50,000 a month to prepare to replace Morgan. He said Monday that he had not been on ValueAct's payroll for more than a year. In April he was named CEO of a startup company called Inference Data, which provides services to lawyers.
In May, after Acxiom announced the sell-out plan, Morgan set up legal residence in Dallas, planning to run the company from a new Dallas office. Two other executives, Rodger Kline, chief administrative leader, and Chris Wolf, chief financial officer were also set to work from Dallas. In all, about 30 employees were going to work there.
On Monday, Acxiom spokeswoman Suellen Vann said the company has announced no new plans for the Dallas office, and she was unable to say how many employees current work in the Dallas office.
Morgan's move to Dallas would have financially advantageous. Unlike Arkansas, Texas has no personal income tax or capital gains tax. That meant, that if the sale of Acxiom to ValueAct Capital Partners and Silver Lake Partners went through, Morgan would have gained substantially - free of state income tax - from the $80 million-plus sale of the 3 million Acxiom shares he directly or indirectly owns.