American List Counsel Inc., Princeton, NJ, and Direct Media Inc., Greenwich, CT, signed a letter of intent to merge, sources told DM News yesterday.
Rumors have been circulating for nearly a week, and it is not known if other investors are involved in the deal. Officials at ALC, DMI and Acxiom Corp., Conway, AR, did not return telephone calls for comment. DMI, which is the largest list firm in the country, was purchased by Acxiom in 1996 for $25 million.
Sources said Acxiom was not happy with DMI's revenue numbers, leading back to before last summer, when there were 30 layoffs so DMI could meet its numbers.
A financial analyst who follows Acxiom said that the DMI division, which Acxiom acquired for $25 million just over three years ago, might not have integrated well with other Acxiom divisions or it simply might not have met Acxiom’s stringent sales targets.
“[The sale of DMI] would not surprise me,” said Robert Bolen, of J.C. Bradford & Co., Nashville, TN. “They have thresholds that they have to reach, and if it does not grow as much as they thought it would, they might want to unload it.”
Acxiom recently reported that the DMI division had revenues that were flat for the year ended March 31, compared with the year ago levels, although the company did not disclose the actual figures.
Acxiom has made several big announcements over the past few weeks, including a decision to discontinue its SmartBase product and instead rely on the Abacus Direct Alliance to provide cooperative catalog database services to its clients.