UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE TO-C
(Rule 14d-100)
TENDER OFFER STATEMENT
UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
ACXIOM CORPORATION
(Name of Subject Company (Issuer))
VA PARTNERS, LLC
(Names of Filing Person (Offeror))
COMMON STOCK, PAR VALUE $0.10 PER SHARE
(Title of Class of Securities)
005 125 109
(CUSIP Number of Class of Securities)
Allison Bennington
ValueAct Capital
435 Pacific Avenue, Fourth Floor
San Francisco, CA 94133
(415) 362-3700
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Filing Persons)
Copies to:
Christopher G. Karras, Esq.
Dechert LLP
Cira Centre
2929 Arch Street
Philadelphia, Pennsylvania 19104-2808
(215) 994-4000
| x | Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
Check the appropriate boxes below to designate any transactions to which the statement relates:
| x | Third-party tender offer subject to Rule 14d-1 |
| ¨ | Issuer tender offer subject to Rule 13e-4. |
| ¨ | Going-private transaction subject to Rule 13e-3. |
| ¨ | Amendment to Schedule 13D under Rule 13d-2. |
Check the following box if the filing is a final amendment reporting the results of the tender offer: ¨
Copies of various soliciting materials are filed herewith as Exhibit 1. Such materials are in the process of being posted to http://www.changeatacxiom.com.
ADDITIONAL INFORMATION
On May 15, 2006, VA Partners, LLC, ValueAct Capital Master Fund, L.P., ValueAct Capital Management, L.P., ValueAct Capital Management, LLC, Jeffrey W. Ubben, George F. Hamel, Jr., Peter H. Kamin, Louis J. Andreozzi and J. Michael Lawrie (collectively, the “Participants”) filed a preliminary proxy statement with the Securities and Exchange Commission with respect to the election of Jeffrey W. Ubben, Louis J. Andreozzi and J. Michael Lawrie to the Board of Directors of Acxiom Corporation at the 2006 Annual Meeting of Stockholders of Acxiom Corporation.
THE PARTICIPANTS STRONGLY ADVISE ALL STOCKHOLDERS OF THE COMPANY TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE FOR FREE ON THE SECURITIES AND EXCHANGE COMMISSION’S WEB SITE AT WWW.SEC.GOV OR FROM THE PARTICIPANTS C/O GEORGESON INC., 17 STATE STREET, 10TH FLOOR, NEW YORK, NY 10004, TOLL FREE: (866) 316-4262.
INFORMATION REGARDING THE PARTICIPANTS AND THEIR DIRECT OR INDIRECT INTERESTS IS AVAILABLE IN THEIR SCHEDULE 13D INITIALLY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 20, 2005, AS SUBSEQUENTLY AMENDED ON FEBRUARY 23, 2005, MARCH 16, 2005, MAY 4, 2005, JUNE 3, 2005, JULY 12, 2005, JULY 13, 2005, SEPTEMBER 27, 2005, OCTOBER 18, 2005, OCTOBER 21, 2005, MARCH 31, 2006, MAY 15, 2006 AND JUNE 21, 2006.
THIS COMMUNICATION IS NOT AN OFFER TO PURCHASE OR THE SOLICITATION OF AN OFFER TO SELL ANY COMMON STOCK. THE SOLICITATION AND OFFER TO PURCHASE COMMON STOCK WILL BE MADE, IF AT ALL, PURSUANT TO AN OFFER TO PURCHASE AND RELATED MATERIALS THAT WOULD BE FURNISHED TO STOCKHOLDERS AND FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. IF THESE MATERIALS ARE FURNISHED TO STOCKHOLDERS, STOCKHOLDERS SHOULD READ THEM CAREFULLY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING THE TERMS AND CONDITIONS OF THE OFFER. IN SUCH EVENT, STOCKHOLDERS WILL BE ABLE TO OBTAIN THE OFFER TO PURCHASE AND RELATED MATERIALS FOR FREE ON THE SECURITIES AND EXCHANGE COMMISSION’S WEB SITE AT WWW.SEC.GOV OR FROM THE PARTICIPANTS C/O GEORGESON INC., 17 STATE STREET, 10TH FLOOR, NEW YORK, NY 10004, TOLL FREE: (866) 316-4262.
 Note: 1 Comparables composite includes the following six companies identified by Acxiom
on slide 9 of its investor briefing filed with the Securities and Exchange Commission on July 11, 2006 on Form 8-K, which slide is entitled, “Acxiom Share Price has
Outperformed Market Indices and Peers Over Past 3 Years”: Dun & Bradstreet, Fair Isaac, Harte-Hanks, Equifax, InfoUSA and Choicepoint (the “Acxiom Comps”) Source: FactSet. Permission to use these figures on this website was neither sought nor
obtained. 5 Year Return Return Since 1 st Offer 6/1/00 – 6/3/05 6/3/05 – 7/28/06 Comparables1 96.3% (7.4)% Acxiom (38.7)% 35.0% NASDAQ (42.2)% 1.1% S&P 500 (17.4)% 6.9% Indexed Stock Price Performance -- 50.0 100.0 150.0 200.0 250.0 6/1/00 8/24/01 11/17/02 2/9/04 5/4/05 7/28/06 Acxiom Corp. Comparables Composite ¹ NASDAQ S&P 500 06/03/2005: VAC announces 1st offer for $23 per share 10/24/2005 : VAC announces 2nd offer for $25 per share 06/21/2006 : $25 per share cash tender for up to 7 mm shares if VAC's Board nominees are elected |
 Acxiom’s ROIC on par with IT management / outsourcing providers despite only 25% of sales from this segment. According to Acxiom’s financial statements for years 2001 through 2005, approximately 75% of Acxiom’s revenues are derived from database marketing services, and approximately 25% of revenues are derived from outsourcing/IT management services. As indicated in the graphs below, the database marketing services peer group generates returns on invested capital (ROIC) that are substantially higher than the IT management/outsourcing peer group. If Acxiom generated returns-on- investment similar to its peers in the database marketing services sector, where it earns the vast majority of its revenue, we believe that its consolidated ROIC would be substantially higher than it has been during the past five years. As the two graphs below indicate, over the past five years, Acxiom’s capital spending as a percentage of revenue and returns on invested capital more closely resemble its peers in the IT management services sector even though only 25% of its revenues are derived from those business lines. |
 Low Returns on Invested Capital 4 Excess Spending Results In Notes: 1 Database Marketing Services include the Acxiom Comps: Dun & Bradstreet, Fair Isaac, Harte-Hanks, Equifax, infoUSA, and ChoicePoint 2 IT Management includes the following companies which are covered by research analysts at Deutsche Bank under the IT Management Services category: Unisys, Keane, Accenture (12 mos. ending 11/30 data used as proxy for CY data and 12 mos. ending 2/28 used as proxy for LTM 3/31/06), Computer Sciences Corp., Affiliated Computer Services, and Electronic Data Systems. Deutsche Bank also includes Cognizant Tech Solutions and Wipro Ltd in its IT Management Services category, but these two companies have not been included here, as they operate with a fundamentally different business model to Acxiom, comprised of a 100% offshore delivery mechanism and therefore have far different margin and growth characteristics. VAC has no
relationship with Deutsche Bank other than the purchase of research and limited trade execution 3 Includes purchased software licenses, capital expenditures, deferral of costs and non-cash PP&E under capital leases 4 Defined as net operating profit after tax divided by the sum of average debt and average shareholders’ equity over the period Capital Spending as % of Revenue Returns on Invested Capital 4 Source: Company filings and Capital IQ. Database Marketing and IT Management composites include companies viewed as comparable to Acxiom by publicly available research and Acxiom. Permission to use these figures on this website was neither sought nor obtained. 12.3% 8.0% 13.1% 15.2% 2.7% 2.6% 2.9% 3.0% 3.4% 4.0% 6.0% 5.5% 5.7% 5.5% 5.2% 5.1% 13.8% 14.8% -- 5.0% 10.0% 15.0% 20.0% CY 2001 CY 2002 CY 2003 CY 2004 CY 2005 LTM 3/31/06 Database Marketing Services ¹ IT Management ² Acxiom³ 18.4% 0.9% 6.9% 5.1% 8.0% 21.6% 23.9% 23.9% 22.3% 22.1% 23.0% 11.0% 14.8% 15.9% 12.0% 12.5% 7.1% 8.3% -- 5.0% 10.0% 15.0% 20.0% 25.0% CY 2001 CY 2002 CY 2003 CY 2004 CY 2005 LTM 3/31/06 Database Marketing Services ¹ IT Management ² Acxiom |
 Historical EBIT Margins¹ Notes: 1 Adjusted for non-recurring items 2 Database Marketing Services include the Acxiom Comps: Dun & Bradstreet, Fair Isaac,
Harte-Hanks, Equifax, infoUSA, and ChoicePoint 3 IT Management includes the following companies which are covered by research analysts at Deutsche Bank under the IT Management Services category: Unisys, Keane, Accenture (12 mos. ending 11/30 data used as proxy for CY data and 12 mos. ending 2/28 used as proxy for LTM 3/31/06), Computer Sciences Corp., Affiliated Computer Services, and Electronic Data Systems. Deutsche Bank also includes Cognizant Tech Solutions and Wipro Ltd in its IT Management Services category, but these two companies have not been included here, as they operate with a fundamentally different business model to Acxiom, comprised of a 100% offshore delivery mechanism and therefore have far different margin and growth characteristics. VAC has no relationship with Deutsche Bank other than the purchase of research and limited trade execution Acxiom’s consolidated EBIT margins closer to IT management / outsourcing providers despite only 25% of sales from this segment. Source: Company filings and Capital IQ. Database Marketing and IT Management composites include
companies viewed as comparable to Acxiom by publicly available research and
Acxiom. Permission to use these figures on this website was neither sought
nor obtained. 1.6% 20.4% 22.9% 22.8% 22.0% 22.5% 22.8% 6.4% 7.7% 7.7% 6.6% 7.7% 8.7% 11.1% 9.5% 10.9% 7.8% 10.6% -- 5.0% 10.0% 15.0% 20.0% 25.0% CY 2001 CY 2002 CY 2003 CY 2004 CY 2005 LTM 3/31/06 Database Marketing Services ² IT Management ³ Acxiom |
 FY2004A
– FY2006A Revenue Bridge Notes: 1 Represents average of organic revenue growth (revenue adjusted for material acquisitions, divestitures, and foreign currency effects) for the Acxiom Comps: Dun & Bradstreet, Fair Isaac, Harte-Hanks (excluding “Shoppers” segment), infoUSA, and ChoicePoint. Equifax is excluded due to insufficient data 2 Increase of $128.5 million is primarily attributable to the acquisitions of Claritas Europe and Consodata per 2006 10K, p. F-4 3 Acquisition of Digital Impact, Inc., InsightAmerica, Inc., and Smart DM Holdings Inc. 4 Company consolidated IT management with US Services and Data in FY2006. For comparison purposes, FY2006 information is presented consistently with the FY2005 segment reporting assuming the same level of intercompany eliminations of $17 million FY06 core US Services & Data growth slips to 1.3%. IT management and acquisitions drive sales growth. Source: Company filings. Permission to use these figures on this website was neither sought nor obtained. Internal Growth Internal Growth vs. vs. Acxiom Comparables Revenue YoY Growth Internal Growth¹ Total FY2004 Revenue $1,010.8 FY2004 US Services & Data Revenue $688.6 Growth: US Services & Data: Internal Growth 46.7 6.8% 5.1% FY2005 Total US Services & Data Revenue $735.3 6.8% International Services & Data² 212.5 152.9% IT Management Services 292.2 16.2% Intercompany Eliminations (17.0) Total FY2005 Revenue $1,223.0 21.0% FY2005 US Services & Data Revenue $735.3 Growth: Acquisition Growth ³ 66.2 9.0% US Services & Data: Internal Growth 9.9 1.3% 5.2% FY2006 Total US Services & Data Revenue $811.4 10.3% International Services & Data 184.9 (13.0%) IT Management Services 353.3 20.9% Intercompany Eliminations 4 (17.0) Total FY2006 Revenue $1,332.6 9.0% |