Signs Point Toward An ALC-DMI Merger
The Acxiom-Direct Media marriage may be at an end.
Sources said that a letter of intent was signed on Monday for a merger between American List Counsel Inc. (ALC), Princeton, NJ, and Direct Media Inc. (DMI). The discussions are continuing, the sources said.
Details were sketchy, and executives from the companies were unavailable for comment. But rumors about a deal have been rampant since late last week.
In a separate development, Acxiom announced a 1.5 million share stock offering.
Acxiom purchased Direct Media, the world’s largest list management/brokerage firm, for $25 million in 1996. DMI founder Dave Florence acknowledged at the time that part of the reason he chose to sell was that he lacked a successor.
“We have plenty of guys who can go out and do the sales and marketing, but we don’t have anyone who can run the firm, and that includes me,” he said.
In March of this year, Acxiom company leader Charles Morgan told editors from DIRECT that “Acxiom has not done a great job leveraging that asset.”
Morgan also said that Acxiom had been contacted about a possible sale, but that “no negotiations have occurred.” He pointed out that Acxiom had “an enormous number of relationships with people who have content at DMI.”
Speculation is high that Acxiom would hold onto a portion of the entity that resulted from the merger, and that other investors would be involved besides ALC.
Sources said it has not yet been determined how the two companies will come together.
Acxiom has registered to sell 1.5 million shares of its common stock. At close-of-trading price of 26-1/2 yesterday, the sale would yield approximately $39.7 million. The Pritzker Foundation, which received Acxiom shares from Trans Union LLC and Marmon Industrial LLC, intends to offer an additional 3.9 million shares.
If consummated, the merger would represent yet another major change in Acxiom’s relationship with its list clients over the last two months. In mid-May the company formed a relationship with Abacus Direct under which Acxiom will discontinue its SmartBase product and rely on the Abacus Alliance to provide cooperative catalog database services to its clients.
A spokesperson for Acxiom said that the company has a policy of not commenting on any rumors or speculation about its business operations. Executives at ALC did not return telephone calls.
For the fiscal year ended March 31 Acxiom’s revenue was just under $730 million, up 28% from $569 million in 1997. Net earnings were $65.5 million, up 34% from $49 million. But the company showed a net loss of $16.4 million, resulting primarily from charges to the acquisition of May & Speh, three database marketing units from Deluxe Corp., and other purchases both made and pending.
