Acxiom executives and key shareholders are convinced selling the business in two pieces, first AMS then LiveRamp, could yield huge returns over Acxiom’s current market cap of about $2.2 billion.
LiveRamp’s value as a standalone middleware SaaS business is obscured within Acxiom, said a source, and considered independently would come with a higher multiple.
LiveRamp’s potential acquirers would also be highly strategic marketing clouds like Oracle, Adobe, Salesforce or Nielsen, which often put higher price tags on deals.
BMO Capital Markets raised its price target on Acxiom stock this year because it expects the strategic review process to unlock value, senior analyst Dan Salmon wrote in an investor note.
And even in February this year Salmon said not to rule out a second deal for LiveRamp, considering the scaled value a marketing cloud company could generate from the product.
Anxiety about consumers’ data privacy concerns could also be motivating Acxiom.
Acxiom’s shares dropped by 20% last month when Facebook said it would discontinue third-party advertising data.
And with GDPR on the horizon, LiveRamp’s identity-matching service could also be penalized by the European Commission, making this a good time to sell high on a business it picked up for $300 million four years ago and could go for billions now, one source said.
GDPR is just a start, Howe told investors on Thursday, pointing to a California ballot initiative for stronger consumer privacy and data standards.
Acxiom’s divestiture of AMS and LiveRamp is likely to extend to late 2019 or into 2020, said one person with knowledge of Acxiom’s strategic reviews.
Meggan Powers, Acxiom VP of corporate communications, told AdExchanger the company would not comment on market rumors or speculation.