Alliance Data to Sell Epsilon Business in $4.4B Cash Deal

Publicis called Epsilon a unique technology and platforms company that has "unparalleled" data assets that the company has built over years.

Alliance Data

Alliance Data Systems Corp., a Plano-based global provider of data-driven marketing and loyalty solutions, has agreed to sell its Epsilon business to Publicis Groupe for $4.4 billion in cash.

Paris, France-based Publicis Groupe is one of the world’s largest global marketing, creative, and business transformation companies.

“I’m pleased to say today’s announcement represents a trifecta win for Alliance Data, Epsilon and Publicis Groupe,” said Ed Heffernan, president and CEO of Alliance Data, in a statement. “The announcement of this transaction represents the culmination of an extensive assessment of strategic options for our Epsilon business. With this transaction, Alliance Data is executing on its previously announced goals of transitioning into a leaner, more focused organization and unlocking additional shareholder value while also finding what we believe to be the right home for Epsilon’s technology, data assets and associates.”

Heffernan said that the unique relationships cultivated between Epsilon and the other Alliance Data businesses will remain intact, and he and his team “look forward to working with Publicis Groupe to develop a broader relationship, and promoting mutual and sustainable growth going forward.”

“The announcement of this transaction represents the culmination of an extensive assessment of strategic options for our Epsilon business.”
Ed Heffernan

The transaction, expected to close in early Q3, was unanimously approved by Alliance Data’s board of directors.

Alliance Data said it expects to use the full amount to repurchase shares and pay down corporate debt. Net cash proceeds, after tax obligations and fees associated with the transaction, are expected to be $3.5 billion. More details about the deal will be provided on the company’s Q1 earnings call scheduled to be released April 25.

Epsilon offers a wide range of loyalty marketing services, such as database marketing, direct mail, email marketing, web development, loyalty programs, analytics, data services, strategic consulting, and creative services.

“Epsilon is a unique asset with world-class capabilities that many of Publicis Groupe’s clients are clamoring for us to add to our current portfolio,” Arthur Sadoun, chairman and CEO of Publicis Groupe, said in a statement. “Acquiring Epsilon will allow Publicis to be uniquely positioned to be the preferred partner of our clients in their transformation by delivering personalized experiences to clients at scale.”

Publicis said that Epsilon is a unique technology and platforms company that has “unparalleled” data asset that the company has built over years. The French company said the acquisition of Epsilon will fuel Publicis as a leader of personalized experiences at scale.

Evercore, BofA Merrill Lynch, Morgan Stanley, and Wells Fargo Securities were financial advisers to Alliance Data, and Latham & Watkins LLP acted as legal adviser.

Alliance Data Systems’ history dates to 1996, and is the result of a combination of J.C. Penney’s transaction-processing operation and The Limited’s credit card bank business. Known for its Air Miles loyalty program in Canada, Alliance Data Systems acquired Conversant in 2014 to boost its digital marketing efforts.

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