Acxiom Corp. has bought three data base marketing software business units from Deluxe Corp. to expand its presence in retail banking.
The Conway, Ark.-based provider of data base marketing software and services bought Deluxe Data Resources, Deluxe MarketWise, and Fusion Marketing for cash. Terms were not disclosed.
"Our desire is to broaden our presence in financial services, and this acquisition jump-starts our mid-tier strategy," said Greg Bjorndahl, marketing division leader for Acxiom, which sells to cataloguers, banks, insurance and mortgage firms.
Deluxe, a St. Paul-based check printing giant, plans to stick to activities more closely related to its core business, such as check verification and electronic benefits transfer. It hopes that by narrowing its focus it can cut 2,500 of its 18,000 jobs by the end of 2000 and lower its unusually high overhead: 40 cents for every $1 of revenue.
The units sold "were good businesses which only needed greater scale to be successful," said J.A. Blanchard, chairman and CEO of Deluxe, in a press release. They are expected to produce combined revenues of $20 million this year.
Acxiom's customers include 23 of the 25 largest credit card issuers. It has a close relationship with Citigroup, for which it maintains a large customer data base.
Retail banking is "the next big piece of business they see an opportunity in," said Thatcher Thompson, an analyst with Merrill Lynch & Co. who applauded the deal for giving Acxiom "an extensive presence" there.
Mr. Thompson rates Acxiom a "buy," saying the market for data base marketing software across all industries is worth $150 billion and growing 20% annually.
Acxiom was formed in 1969 as a compiler of data and has grown to 5,000 employees globally. It claims to have the country's largest data base of housing values; the information is sold to mortgage lenders for calculating home equity values.
Acxiom's revenues totaled $569 million in the fiscal year that ended last March 31. Merrill Lynch estimates its revenues will increase 23% to $700 million in fiscal 1999.
Acxiom's stock closed Friday at $28.25, up 12 cents from a week earlier. Deluxe closed at $36.9375, up 58 cents.
Mr. Thompson is impressed with Acxiom's attempts to build a data base that would assign a unique identification code to every person and business in the United States. The service is modelled after the Dun & Bradstreet DUNS number, a nine-digit identifier used to track 50 million companies worldwide.
Two years in the making, the data base contains information on 90% of the U.S. population and will become commercially available in the spring. It aggregates public information from Acxiom's data bases, as well as outside credit bureaus, driver's license records, and other data bases.
Mr. Thompson estimates 20 million small and midsize businesses could use the service, which would deliver information through a low-cost network. Large corporations could use the service to standardize the management of data bases across an enterprise.
"This is the Holy Grail, if you will, for Acxiom," Mr. Bjorndahl said.