Interpublic to buy Acxiom’s marketing-services unit for US$2.3 billion

The headquarters of Acxiom Corp. in Little Rock, Arkansas. (Bloomberg pic)

LOS ANGELES: Interpublic Group of Cos., one of the world’s largest advertising companies, agreed to acquire Acxiom Corp.’s marketing-services unit for US$2.3 billion, gaining tools to help clients sift through data to reach potential customers.

Acxiom expects to receive US$1.7 billion in net proceeds, according to a statement Monday. The company plans to repay debt, buy back stock and reinvest in its other business. Interpublic is the owner of advertising companies including Craft, FCB and Magna, and intends to make the Acxiom name one of its brands.

The deal gives Interpublic strength in data management, including information covering two-thirds of the world’s population. Ad companies are increasingly relying on technology tools to prove they can do a better job than Google and Facebook Inc. While the ad industry has struggled to adapt to the rise of data-driven online marketing, Interpublic has fared better lately than bigger rivals such as WPP Plc, in part because of a strong US business.

Following the sale, Acxiom plans to retire all of its debt. It will also begin a US$500 million tender offer for its stock and increase an existing buyback authorization to as much as US$500 million, according to the statement.

The company will be renamed LiveRamp after a business that helps companies match customer data with information available through third-party services. Chief Executive Officer Scott Howe and Chief Financial Office Warren Jenson will remain in their current roles at the company, which will be headquartered in San Francisco.

Acxiom rose 12% to US$38.15 as of 9.48 am in New York, following a 14% rally on Monday. The company announced in February that it would conduct a strategic review of its assets. At Monday’s price, the entire company had a market value of US$2.6 billion. Revenue totalled US$917.4 million in 2017.

Interpublic fell 1.4% to US$22.71. It had almost US$600 million in cash and US$2.09 billion in debt at the end of March, according to data compiled by Bloomberg. Based in New York, Interpublic had 2017 revenue of US$7.9 billion.