Silver Lake and ValueAct's acquisition of Acxiom Corp falls through

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Silver Lake Partners and ValueAct Capital have pulled out of the previously planned $2.25 billion purchase of data management firm Acxiom Corp. through their mutually controlled Axio Holdings LLC. This action came as Acxiom's chairman announced he is stepping down.

The private equity firms have agreed to pay Acxiom $65 million to terminate the deal, which is below the previously set termination fee of $110 million.

"This deal was announced back in May, with Silver Lake jumping in with ValueAct Capital, but the credit markets have changed since then," said Bruce Biegel, senior managing director at the Winterberry Group, New York. "Consider this pricing issue with the fact that Acxiom has a substandard quarter and the risk of a second one doesn't create a comfort level for investors."

While Biegel remains confident in the potential for growth in the data sector, he did point out that the bad credit market is not helpful to Acxiom, many of whose clients are credit card companies and financial services firms suffering from the current economic slump and subprime issues. In addition, he acknowledged challenges to the postal increase earlier this year and the expected increase next year.

This announcement comes as Acxiom's Charles Morgan is retiring as chairman, remaining as the "company leader," as a search for new leadership gets underway.

"Acxiom has been an industry leader for over three decades. We will continue to execute on our long-term strategy to remain the market leader in database marketing, services and data products," Morgan said in a prepared statement.

"While I am disappointed that we could not conclude the merger, we have renewed energy, and [we] remain focused and committed to delivering value for our shareholders and clients."

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