Item 1.01
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Entry into a Material Definitive Agreement
.
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Membership Interest Purchase
Agreement; Contribution Agreement; and Related Transactions
As previously announced, on July 2, 2018, Acxiom Corporation (the
Company
) entered into a Membership Interest Purchase Agreement (the
Purchase Agreement
) with The Interpublic Group of Companies, Inc. (the
IPG
), LiveRamp, Inc., a wholly owned subsidiary of
the Company (
LiveRamp
), and Acxiom Holdings, Inc. (
Holdco
), a newly formed wholly owned subsidiary of the Company. Upon satisfaction of the terms and subject to the conditions set forth in the Purchase
Agreement, IPG will acquire the Companys Acxiom Marketing Solutions business (the
AMS Business
), for $2.3 billion in cash, subject to customary closing adjustments (the
AMS Sale
). Following the AMS
Sale, a successor to the Company will continue to operate the Companys LiveRamp business, an identity technology provider (the
LiveRamp Business
).
As contemplated by the Purchase Agreement, the AMS Sale will occur following a series of internal transactions. As part of these internal
transactions, the Company will engage in a holding company merger (the
Holdco Merger
), pursuant to which Holdco will merge with and into the Company, with the Company surviving as a wholly owned subsidiary of Holdco. As a result
of the Holdco Merger, each issued and outstanding share of Company common stock will convert into one share of Holdco common stock. Following the Holdco Merger, the Company will convert into a limited liability company organized under the laws of
the State of Delaware (the
LLC Conversion
and, together with the Holdco Merger, the
Reorganization
). As further contemplated by the Purchase Agreement, the Company has concurrently entered into a Master
Contribution and Assumption Agreement (the
Contribution Agreement
), among the Company, LiveRamp and Holdco. Pursuant to the Contribution Agreement, the Company and its subsidiaries will undergo a series of transactions (the
Separation
) that, once completed together with the Reorganization, will result in Holdco owning LiveRamp and the Company as direct subsidiaries, with LiveRamp holding the LiveRamp Business and the Company holding the AMS Business.
Following this Reorganization and Separation, upon satisfaction of the terms and subject to the conditions set forth in the Purchase Agreement, the AMS Sale will be consummated through the sale of the membership interests in the Company owned by
Holdco to IPG. Following the AMS Sale, the Company will transfer the Acxiom brand name and associated trademarks to IPG, and Holdco will rebrand its business under the LiveRamp name and trade under the ticker symbol
RAMP.
The consummation of the AMS Sale, which is currently expected to occur in the Companys third fiscal quarter,
which ends December 31, 2018, is conditioned upon, among other things, (i) approval of the Companys shareholders, (ii) expiration or termination of applicable waiting periods under the Hart Scott Rodino Act and the German Act
Against Restraints of Competition, (iii) completion of the Reorganization and Separation, (iv) compliance by each party of their respective covenants in all material respects and (v) accuracy of each partys respective
representations, subject to materiality thresholds. The closing of the AMS Sale will occur on the first business day of the calendar month on or immediately following the third business day following the satisfaction or
waiver of each of the conditions to closing. The transaction is not subject to a financing condition.
The Purchase Agreement also
provides for certain termination rights for both the Company and IPG. Upon termination of the Purchase Agreement under specified circumstances, including if the Company terminates the Purchase Agreement to enter into an acquisition agreement with
respect to the entire Company (including substantially all of the LiveRamp Business), the Company will be required to pay IPG a termination fee of $86.25 million or, in certain circumstances, up to $15 million of expenses (which is
creditable toward the termination fee).
The foregoing descriptions of the Purchase Agreement and the Contribution Agreement and the
transactions contemplated thereby do not purport to be complete and are subject to, and qualified in its entirety by reference to, the full text of the Purchase Agreement and the Contribution Agreement, which are attached as Exhibit 2.1 and Exhibit
2.2, respectively, and are incorporated herein by reference. The Purchase Agreement contains representations and warranties made by the parties as of specific dates and solely for their benefit. The representations and warranties reflect
negotiations between the parties and are not intended as statements of fact to be relied upon by the Companys stockholders or any other person or entity other than the parties to the Purchase Agreement and, in certain cases, represent
allocation decisions among the parties and are modified or qualified by correspondence or confidential disclosures made between the parties in connection with the negotiation of the Purchase Agreement (which disclosures are not reflected in the
Purchase Agreement itself, may not be true as of any date other than the date made, or may apply standards of materiality in a way that is different from what may be viewed as material by stockholders). Accordingly, the representations and
warranties may not describe the actual state of affairs at the date they were made or at any other time, and stockholders should not rely on them as statements of fact. Moreover, information concerning the subject matter of the representations and
warranties may change after the date of the Purchase Agreement.