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Acxiom Deal Gets the Ax

Shares plunge after private-equity buyers pull out of a $2.25 billion buyout.

Shares of



tumbled almost 20% Monday on news that the company's planned buyout was terminated.

Private-equity firms ValueAct Capital and Silver Lake Partners had agreed in May to acquire Acxiom for $2.25 billion. The firms will pay a $65 million cash settlement to end the agreement.

The news comes amid a crunch in the credit markets that has derailed private-equity buying, as well as worsening financial results at Acxiom, a maker of data-management systems. For the first quarter ended June 30, Acxiom reported a loss of $11.5 million, compared with a profit of $17.8 million a year earlier.

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Acxiom said Monday afternoon that it expects the recently ended second quarter to show a sequential improvement in revenue and income from operations. The company also noted that the $65 million termination payment was substantially more than any one-time expenses tied to the deal.

In the first quarter, buyout-related costs cut earnings by $18.5 million, or 24 cents a share.

Also Monday, Acxiom Chairman Charles Morgan announced his retirement, effective once a successor has been named.

"Acxiom has been an industry leader for over three decades, and we will continue to execute on our long-term strategy to remain the market leader in database marketing, services and data products," Morgan said. "While I am disappointed that we could not conclude the merger, we have renewed energy and remain focused and committed to delivering value for our shareholders and clients."

The private equity firms had agreed to pay $27.10 a share for Acxiom, but the stock had been trading well below that price as investors worried about trouble for the deal. On Friday, shares closed at just $19.79.

The stock recently was down $3.47 to $16.32.