IPG grabs Acxiom marketing unit in $2.3bn mega deal

IPG, the marketing services group behind McCann Worldwide, Lowe and FCB, has swooped on Acxiom’s marketing services business, shelling out a whopping $2.3bn (£1.7bn), more than 11 times the division’s estimated earnings before interest, tax, depreciation and amortisation (EBITDA) for 2018.
Under the deal, which has already been approved unanimously by the boards of directors of both companies, Acxiom will be run as a standalone division within IPG MediaBrands and retain its brand name.
The acquisition covers Acxiom’s data strategy and management, audience creation and analytics capabilities but does not include the LiveRamp identity resolutions part of the Acxiom Corporation.
According to IPG, the deal will deliver additional and diverse revenue in the first year and represents 8% of combined company revenue. It will also give IPG access to Acxiom’s long-term contractual relationships with more than 2,000 clients worldwide.
Acxiom has a market capitalisation of $2.63bn and the marketing services division represented about 75% of its total revenue in the last fiscal year.
In a statement, IPG said the combination brings together media and marketing agency expertise with data and personalised messaging. Acxiom claims it now holds data on 2.2 billion consumers and manages 20 billion customer records.
Acxiom has over 2,100 staff, although whether they will all still be “relevant” to the new owner remains to be seen.
IPG chairman and CEO Michael Roth said: “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 personalised brand experiences across every consumer touchpoint,”
“Combining Acxiom 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.”
Roth said the two companies spent the past year working to power IPG’s AMP data platform and had recognised a good cultural fit.
“We’ve seen that the combination creates value for our clients, as it will for our shareholders,” he said.
However, Acxiom is facing scrutiny over its data practices after Privacy International named the business as one of the key targets of a new campaign which will investigate what it brands “the hidden data ecosystem”.
According to Privacy International, this “comprises thousands of non-consumer facing data companies – such as Acxiom, Criteo, Quantcast – that amass and exploit large amounts of personal data”.
Using the rights and obligations provided by GDPR, the organisation’s campaign will probe a swathe of companies whose business models it claims raise questions under the new regulation.