Acxiom to Sell Background Screening Unit to Sterling Infosystems
Company Stock Repurchase Program Refreshed to $50 Million
LITTLE ROCK, Ark.--(BUSINESS WIRE)-- Acxiom® Corporation (Nasdaq: ACXM), a recognized leader in marketing services and technology, today announced that it has agreed to sell its background screening unit, Acxiom Information Security Systems (AISS), to Sterling Infosystems, the third largest background screening company in the world.
AISS, which Acxiom (ACXM) acquired in 2002, has received a number of industry recognitions and accolades under Acxioms stewardship, including accreditation by the National Association of Professional Background Screeners (NAPBS) and being named one of the Top 12 Background Screeners in the U.S. by HRO Today. The sale of the unit for approximately $74 million is expected to close within 60 days.
We have completed a careful evaluation of our business portfolio and strategy, said Acxiom CEO and President Scott Howe. AISS has been a good performer for Acxiom, but its divestiture is part of our long-term strategy of placing a greater emphasis on our core database and marketing services business. This will allow us to concentrate on what we do best while providing AISS with new opportunities to flourish as part of an organization solely focused on this service.
AISS is the perfect fit for our globally expanding business, said William Greenblatt, CEO and founder of Sterling Infosystems. AISS is well known for the reliability and accuracy of its products. We look forward to welcoming the company into our operations.
The net proceeds from the AISS divestiture, in combination with Acxioms existing cash balances and expected future cash flow, will be used for general corporate purposes including:
- A meaningful investment into the modernization and feature enhancement of Acxioms Data and Marketing products, services and solutions. This plan stems from a comprehensive review of Acxioms technology and ongoing dialogue with clients. Over a period of 18 to 36 months, Acxiom believes these enhancements will allow the company to even better meet the emerging needs of our clients and generate positive return for our shareholders.
- An expanded share repurchase program. Acxioms Board of Directors has authorized an expansion of Acxioms share repurchase program. To date, Acxiom has repurchased $39 million of shares on the open market out of an initial $50 million allocation of funds. Under the new program, not including any repurchases previously made, up to $50 million of stock may be repurchased.
- Acxiom does not anticipate pursuing major acquisitions at this time, given the combination of valuations, integration complexity and fit with its planned product enhancements. However, small, tuck-in acquisitions of specific technologies or capabilities may be considered.
Finally, a smaller portion of Acxioms cash balances, approximately $25 million, will be directed to continued debt retirement. This is part of a continued effort to further strengthen Acxioms balance sheet and provide the company with financial flexibility for the future. Acxiom will share more about its strategic plans and use of cash in the next quarterly earnings call in January 2012. For the trailing 12 months ended 9/30/11, AISS had $49 million in revenue and contributed approximately $.04 to Acxioms earnings per share.
About Sterling Infosystems:
Sterling Infosystems, Inc. (www.sterlinginfosystems.com) founded in 1975, is the third largest background screening company in the world with an international presence known for industry leading turn-around-time, customer service and expertise in customizing solutions for industry specific needs. Most recently, Sterling became the only global background screening company in 2011s Inc 5000. Sterling offers a broad range of services, including student screening services, corporate due diligence and background investigation services, occupational health services, and employment-related business tax consulting in the United States and in 200 countries around the world. With a decade as one of the fastest growing background screening companies, their 9,000+ clients range from leading Fortune 500 firms to small and medium sized businesses.
Acxiom is a recognized leader in marketing services and technology that enable marketers to successfully manage audiences, personalize consumer experiences and create profitable customer relationships. Our superior industry-focused, consultative approach combines consumer data and analytics, databases, data integration and consulting solutions for personalized, multichannel marketing strategies. Acxiom leverages over 40 years of experience in data management to deliver high-performance, highly secure, reliable information management services. Founded in 1969, Acxiom is headquartered in Little Rock, Arkansas, USA, and serves clients around the world from locations in the United States, Europe, Asia-Pacific and South America. For more information about Acxiom, visit Acxiom.com.
Acxiom is a registered trademark of Acxiom Corporation.
Forward Looking Statements
This release may contain forward-looking statements including, without limitation, statements concerning the anticipated disposition of AISS and the use of proceeds generated therefrom, the expanded stock repurchase program and future acquisitions. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. The following are factors, among others, that could cause actual results to differ materially from these forward-looking statements: the possibility that we may be not receive the consents and approvals required for the disposition; the possibility that the anticipated benefits from the disposition may not be fully realized or may take longer to realize than expected; the possibility that certain contracts may not generate the anticipated revenue or profitability or may not be closed within the anticipated time frames; the possibility that significant customers may experience extreme, severe economic difficulty or otherwise reduce the amount of business they do with us; the possibility that we will not successfully complete customer contract requirements on time or meet the service levels specified in the contracts, which may result in contract penalties or lost revenue; the possibility that data suppliers might withdraw data from us, leading to our inability to provide certain products and services to our clients, which could lead to decreases in our operating results; the possibility that we may not be able to attract, retain or motivate qualified technical, sales and leadership associates, or that we may lose key associates; the possibility that we may be unable to quickly and seamlessly integrate a new chief executive officer and chief financial officer; the possibility that we will not be able to continue to receive credit upon satisfactory terms and conditions; the possibility that negative changes in economic conditions in general or other conditions might lead to a reduction in demand for our products and services; the possibility that there will be changes in consumer or business information industries and markets that negatively impact the company; the possibility that the historical seasonality of our business may change; the possibility that we will not be able to achieve cost reductions and avoid unanticipated costs; the possibility that the fair value of certain of our assets may not be equal to the carrying value of those assets now or in future time periods; the possibility that changes in accounting pronouncements may occur and may impact these forward-looking statements; the possibility that we may encounter difficulties when entering new markets or industries; the possibility that we could experience loss of data center capacity or interruption of telecommunication links; and other risks and uncertainties, including those detailed from time to time in our periodic reports filed with the Securities and Exchange Commission, including our current reports on Form 8-K, quarterly reports on Form 10-Q and annual reports on Form 10-K, particularly the discussion under the caption Item 1A, RISK FACTORS in our Annual Report on Form 10-K for the year ended March 31, 2011, which was filed with the Securities and Exchange Commission on May 27, 2011.
Acxiom Public Relations
Jonathan Portis, 501-252-0582
Source: Acxiom CorporationCopyright Business Wire 2011