Update:Florence Inks Deal to Buy Back Direct Media
Florence said a group of 10 to 20 Direct Media employees will own 51 percent of the company in a deal that will be financed by Acxiom, Conway, AR, the database services provider that acquired Direct Media in 1996 for $25 million in stock. The new ownership group won't include Florence, but he will remain CEO. Max Bartko was recently named group president of sales and marketing.
Other management team members are Delores Ryan Babcock, Ed Bocknik, Georganne Rossi, Joe Pavone, Judy Wright, Karen Mayhew, Larry May, May Katz, Rick Sarli, Rosemarie Montroy, Sally Coughlin-Blum and Valerie White. The executive team is charged with deciding who the owners will be. Direct Media has a staff of 300 people. "It's definitely going to be an employee-owned company," Florence said.
The exact terms of the acquisition were not immediately available, although sources said the buyout group would have the option to acquire the remaining 49 percent of Direct Media after seven years. A five-member executive board will include two Acxiom appointments.
The deal, which had been expected, ends months of turmoil surrounding the ownership status of Direct Media, which Acxiom decided to sell last year because Direct Media's revenues were not growing at the rate Acxiom demands of its subsidiary businesses. Insiders and other industry observers have said that a severe culture clash prevented the two companies from integrating smoothly, although Direct Media reportedly did become a more efficient operation under Acxiom's strict fiscal controls.
Last spring, American List Counsel, Princeton, NJ, the list firm that had been the largest independent list management and brokerage house, explored the possibility of a merger with Direct Media, and other acquisition scenarios unfolded later in the year.
At one point, Ralph Drybrough and Mark Joyce, the two top executives in Direct Media's business-to-business list division, were planning a buyout of that portion of the company. Acxiom rejected their plan, Drybrough said, and both men have since left Direct Media to start a new firm, MeritDirect in New Canaan, CT, according to Rob Sanchez, a partner at the firm. Drybrough was unavailable for comment.
Direct Media's revenue last year was "in the $40 million range," said Florence, who would not reveal the purchase price. "It'll come out, but they're [Acxiom] going to be the ones bringing it out, not us." Calls to Acxiom were not returned.
Florence said he expects Direct Media to have a strong BTB representation.
"Out of the 22 brokers, six of them are full-time BTB, and there's another three to four that have BTB clients which work both sides because they're hybrid - consumer and BTB."