Acxiom Deal Falls Through, New Company Leader Sought
The proposed $2.25 billion buyout of Acxiom Corp. has fallen through. Former suitors Silver Lake and ValueAct Capital have ponied up $65 million to terminate the deal. Acxiom will remain a publicly traded company.
“While I am disappointed that we could not conclude the merger, we have renewed energy and remained focused and committed to delivering value for our shareholders and clients,” company leader Charles Morgan said in a statement.
Morgan had been considering stepping down from his position as part of the transaction. He will stay on as the firm searches for new leadership. A four-person committee is evaluating both internal and external candidates for his position.
The deal had dragged since ValueAct and Silver Lake made their $27.10-per-share offer in May, following a nasty takeover attempt by Value Act in 2005. In addition to the $2.25 billion payment, ValueAct and Silver Lake had agreed to assume $756 million in company debt.
The deal’s collapse didn’t come as a complete surprise to market observers. Despite the offer of $27.10 per share, Acxiom’s stock price had traded below $27 a share since July.
“The stock had been reflecting a lack of conviction that the deal would get done, based on the financial results that had been delivered to the public,” said Matthew Kratter, a vice president at marketing investment banking firm Petsky Prunier.
On Monday, the company’s stock closed at $15.89, down $3.90 from Friday’s close.
“The overall market has changed,” Kratter continued. “Over the summer, the environment got a lot more difficult. Banks were less inclined to offer the looser terms they [previously] had to borrowers. Deals on the margin are most likely to be affected.”
That said Kratter doesn’t expect market conditions to affect a buyout announced at the same time as the Acxiom deal – Blackstone Capital Partners’ $7.8 billion acquisition of Alliance data Systems Corp. The $7.8 billion price tag includes debt assumption.
“Acxiom is still a very solid company,” Kratter said. “Its best strategy is to do some internal restructuring and express confidence about growth.”
And Acxiom has, acquiring EchoTarget in September. “Other moderately sized growth-oriented acquisitions could be a sensible path,” Kratter said.
