Alliance Data Systems Corporation and Conversant, Inc. have announced a definitive agreement with the purchase of Conversant.
The terms and agreement of the purchase was revealed and Alliance Data will acquire all outstanding shares of Conversant paid in a combination of cash and stock which is valued at approximately $2.3 billion. The transaction has been approved by all the members of the boards of directors Alliance Data and Conversant.
The purchase price, structured to be paid with approximately 48 percent cash and 52 percent ADS shares. The transaction is subject to regulatory approval and customary closing conditions. This transaction is expected to close by the end of 2014.
According to experts, Alliance Data’s acquisition of Conversant is a smart step for a marketing services company to empower its clients. This acquisition will also effectively market their products and services to its customers across all channels. Alliance Data has the following business segments: Epsilon, LoyaltyOne and Private Label.
On the other hand, the acquisition of Conversant is highly complementary to its business goals. Conversant is a company that provides not only enhanced services when it comes to data, but also cross-device. This means from desktop to tablet to mobile and cross-channel technology using Conversant’s Common ID.
Ed Heffernan, Alliance Data’s chief executive officer has mentioned in an interview “The strategic and cultural fit of the two companies is ideal. Importantly, the acquisition “bulks up” Alliance Data in digital marketing, which is experiencing the fastest secular growth. I am also excited about leveraging Conversant’s digital capabilities across the entire Alliance Data organization. I believe this combination will boost demand for Conversant’s products and also potentially drive growth rates with existing clients at Epsilon and all other Alliance Data businesses.”
Hefferman also added “Another salient benefit is a more balanced and diversified Alliance Data. Once the acquisition is completed, 35 percent of consolidated revenue will be from Epsilon/Conversant, 25 percent from LoyaltyOne and 40 percent from Private Label.”
Meanwhile John Giuliani, Conversant chief executive officer mentioned in an interview “As Conversant continues down its path towards providing unique insights on its clients’ customers, we will distinguish ourselves from the more commodity-like aspects of the display space. Through the use of first-party transactional data, and the ability to use the insights gleaned to “personalize” campaigns, our model becomes more similar to Alliance Data’s successful model. Gaining access to the huge data-driven platforms at Alliance Data will allow the combined entity to offer clients an end-to-end solution across all channels.”
Alliance Data and Conversant will compete for their share of the $400 billion annual marketing spend in North America. This is $150 billion in traditional or general advertising; $150 billion in traditional direct marketing; and $100 billion in digital marketing. And under the terms of the transaction, Conversant shareholders will receive $35.00 per share, representing a 34% premium to the 30 day average closing price of Conversant’s stock. At the announcement, the offer comprises 52% stock and 48% cash, which is equal to $18.20 per share of Alliance Data stock which is based on a fixed exchange ratio of 0.07037 and $16.80 per share of cash to Conversant shareholders.
About Alliance Data:
Alliance Data Systems Corporation is a provider of loyalty and marketing solutions, such as private label credit cards, loyalty programs, and direct marketing services. Services are from the capture and analysis of data derived from efficient data collection. Alliance Data has received the Operational Leadership Award for customer care from Ventana Research in 2011. Alliance Data serves USA and Canada customers with headquarters in Plano, Texas, USA. Alliance Data stock market evolution:
About Ed Heffernan:
Mr. Edward J. Heffernan has been the Chief Executive Officer and President of Alliance Data Systems Corporation since 2009. He served as the Chief Financial Officer and Executive Vice President of Alliance Data Systems, Inc. in 2009. He was responsible for mergers and acquisitions for Alliance Data. Hefferman has nothing but positive thoughts about this latest acquisition with Conversant.
Conversant is an online advertising company, which provides online advertising campaigns and advertising programs for advertisers and advertising agency customers. Their customers are mostly from the United States and from other countries. Their customers include advertisers, advertising agencies, and traffic distribution partners. Their headquarters are in Westlake Village, California. Conversant stock market evolution:
About John Guiliani
John Giuliani serves as president and chief executive officer and is a member of the board of directors of Conversant. Mr. Giuliani joined the senior management team and board in August 2011 and is a seasoned executive with nearly 25 years of experience in growing successful organizations. His amazing ability to manage and to influence his team is evidenced from his past accomplishments. He also worked for Instant Coupon Machine, CPG sales and with Beecham Products and Frito-Lay, Inc.