After months of negotiations, the management of Direct Media Inc. Friday signed a contract to buy the company back from Acxiom Corp.
Dave Florence, founder and CEO of Greenwich, CT-based Direct Media, said that management bought back 51% of the firm from Acxiom, with the option to buy the remaining 49%. Florence declined comment on the purchase price, but said that the price was “in the general neighborhood of what we sold it for.” (The price was reported as $26 million in 1996). The agreement is retroactive to Feb. 1.
Acxiom, Little Rock AR, financed the buyback, to be paid out over seven years at 6% interest, with an option to pre-pay. Direct Media is being operated as an independent company, with Acxiom acting as a minority partner, Florence said.
Florence will head the privately held company as CEO, in partnership with a number of existing management, including Max Bartko, who has been named group president of sales and marketing; Larry May, head of fundraising, May Katz, head of the international brokerage division; Delores Ryan Babcock, a senior broker; Sally Blum Coughlin, head of the Chicago office; Rosemarie Montroy, a manager and broker; and Rick Sarli, the firm’s CFO. More partners are expected to be named.
The buyback includes the consumer, business-to-business, international, fundraising, and interactive divisions. Florence said the goal moving forward is to “regain its spot as the number-one list company in America, and that’s something we are all going to work hard to do.”
Despite a recent exodus of employees working in the B-to-B division, Florence said that the division remains strong, with five brokers and numerous clients, including five of its top ten clients, who have committed to maintaining their relationship with Direct Media.
Ten employees left Direct Media’s B-to-B division over the last several weeks to join Merit Direct, New Canaan, CT, a direct marketing firm founded by Ralph Drybrough. Drybrough left the employ of Direct Media in December as the company’s senior vice president of business list services. Direct Media employs about 300 people.
Florence said a tremendous amount of resources would be dedicated to the firm’s interactive division, DirectMedia.com, to be operated as a separate company.
After Acxiom purchased Direct Media in 1996, some of Direct Media’s internal departments had been combined with Acxiom’s. However, after Acxiom employees pulled out several months ago, in the face of the pending buyback, Direct Media began rebuilding those departments, including human resources, finance, and office management. Direct Media has the option to purchase or lease its computer systems, which are owned and still being maintained by Acxiom.
Florence said the firm plans to remain at its Greenwich location for the foreseeable future.
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