NEW YORK – Interpublic Group (NYSE: IPG) announced it has entered into a definitive agreement with Acxiom Corporation under which IPG will acquire the Acxiom Marketing Solutions business unit in a cash transaction valued at $2.3 billion, or net $2.0 billion after consideration of an acquisition-related benefit of the tax step-up. The agreement has been approved unanimously by the boards of directors of both companies.
The deal combines IPG’s media, creative, marketing services and analytics capabilities, global scale and consumer insights, with AMS’s unrivalled expertise in data management. With the acquisition, the Acxiom brand name will become part of the IPG portfolio; the transaction does not include the LiveRamp business of Acxiom Corporation.
“In a world where everything is becoming data-driven, Acxiom Marketing Solutions offers the deepest set of capabilities for helping companies navigate the complexity of creating personalized brand experiences across every consumer touchpoint,” said Michael Roth, IPG’s Chairman and CEO. “Combining AMS with a range of IPG assets will help us shape the future of our industry. Acxiom’s leadership on data ethics is second to none, its business is solid and growing, and it has long played a foundational role in the marketing ecosystem. The company also boasts 2,100 associates with data and analytics skills that are at a premium in business today. Combined with IPG’s world-class client roster, as well as our talented 50,000-person global workforce across media, advertising and marketing services, and you have an unrivaled offering. Over the last year of working closely with AMS to power our AMP data platform, we’ve seen that our cultures are a great fit, and we’ve also seen that the combination creates value for our clients, as it will for our shareholders,” he continued.
“Everyone knows how valuable data is, but for most businesses it remains an underleveraged asset. There also remains a great deal of uncertainty on how best to combine data with the creation and delivery of marketing messages. Our goal is to solve for those opportunities,” added Philippe Krakowsky, IPG’s Chief Strategy and Talent Officer and Chairman and CEO of IPG Mediabrands. “While marketing and information technology are increasingly converging within client organizations, service providers remain bifurcated. With the skills and capabilities that AMS brings to our portfolio of companies, we can offer clients end-to-end solutions that we believe will change the way in which we work for brands, and accelerate the onset of outcome-driven marketing.”
“This transaction is a great outcome for both Acxiom and our Acxiom Marketing Solutions business unit,” said Acxiom Corporation CEO, Scott Howe. “Acxiom Marketing Solutions is a strong business with deep expertise in data-driven marketing, talented associates and a client roster that includes many of the world’s leading companies. After careful consideration of a variety of options and potential partners, it became clear that a sale of AMS to IPG, with its scale and breadth of complementary services, represented the best possible path forward for our clients and associates.”
Dennis Self and Rick Erwin will continue to serve as co-presidents of AMS, which will remain a stand-alone division, aligned with IPG Mediabrands, reporting into Arun Kumar, Chief Data and Marketing Technology Officer, IPG.
Acxiom Marketing Solutions is the leading provider of data solutions for delivering real-time customer experiences, and includes all of Acxiom’s data and data services. The company has 2,100 employees including 1,600 data specialists, over 2,000 world-class clients, access to hundreds of marketing databases, recognizes 2.2 billion connected consumers and manages over 20 billion customer records. Its capabilities allow brands, media and technology partners to harness data to improve every customer interaction, including:
Data Management Services – taking multiple marketing data and related technologies, including databases, data lakes, ad platforms, and combining them into a simple unified data layer with a complete omnichannel view of customers.
Data Strategy Services – providing clients with a prioritized roadmap for optimizing the use of data and marketing technology.
Analytics Services – delivering independent services for measuring marketing ROI, attributing impact, deepening consumer insights and predicting consumer behavior.
Audience Creation Services – creating ideal audiences through look-alike modeling, advanced scoring, custom segment creation and traditional packaged data offerings.
Summary Terms of Transaction
The transaction has been unanimously approved by the boards of directors of both companies and is anticipated to close before year-end 2018. Completion of the transaction is subject to approval by Acxiom’s stockholders, as well as customary regulatory approvals.
The purchase price represents a multiple of 11.5x AMS’s 2018 estimated EBITDA, net of the benefit of the tax step-up.
IPG has a fully committed $2.3 billion bridge facility and expects to obtain long-term financing to fund the transaction in the debt capital markets before closing
Transaction Will Result in Attractive Financial Benefits
IPG expects the deal to be accretive in the first year after close on an adjusted EPS basis. Adjusted EPS excludes the expense for the amortization of acquired intangibles. IPG expects to build significant incremental revenue and earnings opportunities over time that neither company could obtain on a standalone basis. Additionally, the combination expands profitability metrics on a pro forma basis.
AMS Provides IPG with Significant Diversification Benefits
AMS will represent approximately 8% of the combined company’s revenues, diversifying IPG’s revenue base by client and practice discipline, and adding long-term, contracted revenue streams.
Strong Commitment to Preserve Balance Sheet and Maintain Ratings
IPG remains committed to a strong balance sheet and maintaining solid investment grade credit ratings. In addition, share repurchases will be temporarily suspended.
Advisors
Citi and J.P. Morgan are serving as financial advisors and providing committed debt financing, and Willkie Farr & Gallagher LLP is serving as legal advisor to IPG.
About Interpublic
Interpublic Group (NYSE: IPG) is one of the world’s leading organizations of advertising agencies and marketing services companies. Major global brands include Craft, FCB (Foote, Cone & Belding), FutureBrand, Golin, Huge, Initiative, Jack Morton, MAGNA, McCann, Momentum, MRM//McCann, MullenLowe Group, Octagon, R/GA, UM and Weber Shandwick. Other leading brands include Avrett Free Ginsberg, Campbell Ewald, Carmichael Lynch, Deutsch, Hill Holliday, ID Media and The Martin Agency. For more information, please visit www.interpublic.com.
About Acxiom Marketing Solutions
Acxiom Marketing Solutions is the leading provider of data solutions for powering exceptional customer experiences and includes all of Acxiom’s data and data services. Its capabilities allow brands, agencies, media and technology partners to harness data to improve every customer interaction.
