Acxiom to sell email business

Data firm Zeta Interactive to buy service in $22M deal

Graphs show Acxiom Corp's First quarter finances
Graphs show Acxiom Corp's First quarter finances

Acxiom Corp. will sell its email services business to Zeta Interactive, a data-marketing firm, in a $22 million deal, the Little Rock-based company announced Thursday.

Acxiom said the deal includes $18 million in cash and a $4 million promissory note payable 12 months after the close of the sale with interest. The sale was included in the company's fiscal 2017 first-quarter financial results.

"For the past several years Acxiom has been sharpening its focus around what we do best," said Chief Executive Officer Scott Howe.

The email business, called Acxiom Impact, "falls outside our strategy," he said during a conference call with investors.

Acxiom will use the funds from the deal, which is expected to close in the fiscal 2017 second quarter, to increase its share repurchasing program by $100 million to $400 million.

Acxiom said that with the sale of Acxiom Impact it will also enter into a multiyear agreement to provide Zeta Interactive with services from its connectivity and audience solutions divisions.

When the deal closes, employees working for Acxiom Impact will move to Zeta Interactive, said spokesman Sherry Hamilton in an email. She did not say how many employees that involves.

In its 2017 first-quarter financial results, the company reported that it turned a profit of $3.98 million, or 5 cents per share, for the first quarter, reversing a loss of $1.04 million, or 1 cent per share, during the same period a year ago.

Brett Huff, an analyst with Stephens Inc., expected the company to post a loss of 1 cent per share for the first quarter.

He also expected Acxiom to have $202.9 million in revenue for the period, Huff said in an email before the company released its financial results.

Acxiom had revenue of $214.8 million for the quarter ending June 30, up from $196.9 million during the same period a year ago.

Acxiom stock rose 0.43 percent to $23.10 on the Nasdaq stock exchange Thursday. The company released it's quarterly financial results after markets closed.

Acxiom gathers consumer information from public records, shopping habits and clients to help its customers develop targeted marketing campaigns. In 2014, the company bought LiveRamp, a marketing services company that helps Acxiom collect offline data for marketing applications.

During the first quarter, LiveRamp expanded its partnership with Google, which will enable firms to use data quicker to target consumers on YouTube, Google Search and Gmail.

"We think this is important because we believe it is another piece of evidence that the large marketers, even those with among the best consumer data sets in the marketing ecosystem, still continue to rely more and more on [Acxiom's] data and functionality to help target ads," Huff said in a recent research note about the partnership.

Acxiom bought back 926,000 shares for about $20 million during the first quarter. Since 2011, the company has repurchased 16.4 million shares for $275 million.

Business on 08/05/2016

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