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Data Firm Deal-O-Rama: Acxiom, Alliance Data Acquired in Separate Transactions
May 17, 2007 6:20 PM , By Richard H. Levey
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How much is consumers’ personal data worth? Nearly $11 billion, based on two separate acquisitions made during the last two days.

On Thursday, Alliance Data Systems Corp. entered into an acquisition agreement with Blackstone Capital Partners V L.P in a transaction valued at approximately $7.8 billion, including debt assumption.

Blackstone will acquire all of the outstanding common stock of Alliance Data for $81.75 per share in cash.

The deal comes hot on the heels of a Wednesday night announcement by Acxiom Corp. that it had accepted a purchase offer from investment firms ValueAct Capital and Silver Lake. That deal is valued at $2.25 billion, and ValueAct and Silver Lake will also assume $756 million in debt.

The Acxiom deal marks the ultimate turnaround in the firm’s relationship with ValueAct. In 2005, ValueAct launched a hostile takeover of the Little Rock, AR-based data compiler. While the effort was unsuccessful, it did result in ValueAct managing partner Jeffrey Ubben being placed on Acxiom’s board.

The Alliance Data deal does not come with the acrimonious history Acxiom has with its suitor. Acxiom CEO Charles Morgan addressed the strange bedfellows nature of his firm’s acquisition in a conference call. “We certainly had our battles with them in years past,” Morgan said. “At one time we did have mistrust and misunderstanding, but that environment has now been dramatically transformed. We now have an atmosphere with a lot of mutual understanding and, I might add, trust.”

The per-share purchase price of $27.10 represents a premium over the $25 ValueAct had offered in late 2005. But some in the market seem to be speculating that there will be a counter-offer: The stock closed on Thursday at $27.95, indicating that at least a few investors expect the price to rise above the sale price. On Wednesday, the last day before the deal was announced, Acxiom’s stock closed at $23.67 per share.

By contrast, Alliance’s stock rose to $78.46, below the price offered by Blackstone. But the Alliance Data deal is valued at a 30% premium over Wednesday’s closing price, compared with 14% for Acxiom’s closing price.

According to the purchase agreement, Acxiom may entertain bids from other companies during the next 60 days. The ValueAct/Silver Lake deal is expected to close within four months, pending a two-thirds approval vote by shareholders.

Morgan said that in addition to ValueAct and Silver Lake, the company had received bids from two other private equity firms.

In addition, Christopher W. Wolf will join Acxiom as CFO in late May or early June. Wolf has most recently been an independent consultant to companies in the marketing retail, and technology fields. Before that, he was CFO of NiuTech LLC, an Internet marketing services firm. Previously, he had been CFO at Catalina Marketing Corp.

Wolf will replace Rodger S. Kline, who has served as acting CFO for the last three months.

During the conference call, analyst Mark Bacurin asked whether Morgan would be leaving Little Rock for Texas, and whether the potential move signified a move of Acxiom’s headquarters. Morgan sidestepped the question about his own activities, but stressed that Acxiom was going to stay in Little Rock.

Asked whether he was going to remain CEO, Morgan said “I don’t know…I want to. It will be my desire to. I’ve had no discussions with them about my continued employment. I want to continue to run the business. I plan to. They’ve given me no indication I will not be. As a matter of fact, I’ve got indication that they want me to, but we’ve been unable to have any of those discussions whatsoever up until this time.”

Separately, Acxiom reported that during fiscal 2007, it generated $70.7 million in net earnings, up from $64.1 million in fiscal 2006. The company’s revenue rose from $1.33 billion to $1.40 billion during the same period. The year ended March 31.



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