Acxiom Corporation (ACXM - Analyst Report) recently announced Warren C. Jenson as the company’s Chief Financial Officer (CFO) and Executive Vice President.
Prior to his appointment at Acxiom, Jenson had been CFO of Electronic Arts (EA - Analyst Report) , Amazon.com (AMZN - Analyst Report) , Delta Air Lines (DAL - Analyst Report) and NBC. Most recently, he served as COO of Silver Spring Networks, a leader in developing Smart Grid networking technology.
On March 28, 2011, John A. Meyer resigned as the CEO, President and a Director of the Board. Scott Howe was appointed as the CEO and President on July 26, 2011. Also, CFO Christopher W. Wolf resigned on June 1, 2011.
Acxiom is currently in transition phase with changes in top management and business divestitures.
Last month, Acxiom sold its background screening unit, Acxiom Information Security Systems (AISS), to Sterling Infosystems, for $74 million.
Acxiom has acquired AISS in 2002. The sale is expected to close within 60 days. This business segment contributed approximately $49 million in revenue and contributed $0.04 to the bottom in the twelve months
Management intends to use the net proceeds from the AISS divestiture with Acxiom’s existing cash balances and expected future cash flow for general corporate purposes. This includes investing into new technologies and upgrading Acxiom’s Data and Marketing products, services and solutions.
In addition, Acxiom also expanded its existing share repurchase program by $50 million. Acxiom has already repurchased $39 million of shares out of an initial $50 million allocation of funds. Under the new program, not including any repurchases previously made, up to $50 million of stock may be repurchased.
The company also targets small, tuck-in acquisitions of specific technologies or capabilities. Acxiom also plans to retire approximately $25 million of debt.
It remains to be seen how the new management will turnaround the company. Changes in top management positions of a company usually have a pervasive impact on its overall functioning, goals and investor perception. It takes time for a company to stabilize after such important changes and, therefore, it would be advisable for investors to stay on sidelines.
Hence, we maintain our Neutral recommendation. Our Neutral recommendation is supported by Zacks #3 Rank, which translates into a short-term rating of Hold.