Acxiom's (ACXM) LiveRamp to Acquire Arbor and Circulate in $140M Deal; FY17 Outlook Updated

November 17, 2016 4:24 PM EST

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LiveRamp, an Acxiom company (Nasdaq: ACXM), announced that it has entered into definitive purchase agreements to acquire Arbor and Circulate, two companies at the forefront of helping publishers connect people-based data to the marketing ecosystem, for total cash consideration of approximately $140 million. In addition, the Company will issue $50 million of Acxiom stock awards replacing unvested equity.

The acquisitions increase the scale of LiveRamp's omnichannel identity graph and network. The combined strength of LiveRamp, Arbor and Circulate enable brands to expand people-based marketing beyond Google and Facebook, while allowing publishers to better support marketer's people-based initiatives.

"The ability to execute people-based marketing at scale across mobile and online channels is important for us," said Vitaly Tsivin, Senior Vice President of Business Intelligence at AMC Networks, "and the more consumers we can reach in digital channels the better. We're excited about this improvement to LiveRamp's identity resolution platform."

"This is a huge win for the LiveRamp ecosystem and the biggest set of actions we could have taken to increase the value of our network and thereby deliver more value to our clients and partners," said Travis May, President and General Manager at LiveRamp. "These acquisitions both increase the deterministic reach we can provide marketers and gives us the ability to help all publishers tap into people-based marketing budgets."

In their October, 2016 report "The Strategic Role of Identity Resolution," Forrester Research highlighted this capability as a foundational element of any marketing cloud, noting that it was critical for marketers to recognize consumers in digital channels in order to apply context to marketing. The report notes that, "For customer-obsessed marketers, customer recognition in single channels isn't enough; identity resolution spans every interaction and provides a broad view of the customer, creating the strategic foundation for cross-channel marketing."

Arbor and Circulate double LiveRamp's publisher partnerships to more than 450 and bring strong "mobile-first" technology, international reach, and impressive teams to LiveRamp.

"We saw this as a great opportunity to accelerate adoption and the value we deliver," said David Yaffe, CEO of Arbor. "With IdentityLink, we'll be able to empower our publishers with new tools, insights and relationships that build on our current industry-leading monetization platform."

Ari Jacoby, CEO of Circulate, noted "Our publishers provide a global footprint when it comes to identity-based data. "As part of LiveRamp, we can help them better monetize that data working with marketers who want to reach global audiences, and accelerate LiveRamp's global expansion."

"The Arbor and Circulate teams bring a wealth of experience to LiveRamp, and it's great to have them on board," added May. "These acquisitions will allow us to both increase the value we provide to marketers—we're particularly excited Arbor and Circulate are 'mobile first' companies that will increase our people-based reach in this key medium—and accelerate our ability to extend our identity resolution platform across the marketing ecosystem with the launch of IdentityLink for publishers early next year."

Financial Impact

The addition of Arbor and Circulate extends LiveRamp's leadership in identity resolution and provides meaningful scale to drive growth and value for Acxiom's shareholders. In fiscal 2017, Arbor and Circulate are expected to contribute approximately $5 million in revenue and be neutral to non-GAAP diluted earnings per share. In addition, Acxiom expects the transactions to be dilutive by $0.11 to GAAP diluted earnings per share due to higher non-cash compensation and estimated purchased intangible asset amortization. In fiscal 2018, Acxiom expects the transactions to be accretive to both EBITDA and non-GAAP diluted earnings per share.

Fiscal 2017 Guidance Update

Acxiom's non-GAAP guidance excludes the impact of non-cash compensation, estimated purchased intangible asset amortization, restructuring charges and separation and transformation costs.

For fiscal 2017, Acxiom now expects to report:

  • Revenue in the range of $865 million to $875 million. (The Street sees $870.6 million.)
  • GAAP diluted earnings per share of approximately $0.01
  • Non-GAAP diluted earnings per share of approximately $0.60. (The Street sees $0.61.)

Conference Call

Acxiom will hold a conference call at 2:00 p.m. PT today to further discuss the transaction. The conference call will be webcast live on the Company's website investors.acxiom.com and will be available for replay. The conference call is also accessible via telephone by dialing 877-710-0217 or 408-427-3845 for international callers and using Conference ID code 20744053.

A slide presentation will be referenced during the call and can be accessed here.



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