Alliance Data Looks at Possible Sale of Epsilon

Plano, Texas-based marketing and loyalty solutions business Alliance Data is considering the sale of its data intelligence and customer insights business Epsilon, including digital media arm Conversant.

The parent company, which focuses on data-driven strategies for 'creating and increasing' customer loyalty, says it is 'exploring strategic alternatives' for Epsilon after a 'lengthy' strategic review of its portfolio underlined the different strategies needed to grow Epsilon and its core Card Services businesses. Epsilon's assets include personalized digital marketing specialist Conversant (formerly known as ValueClick), which it acquired four years ago in a cash and stock deal worth up to $2.3 billion, and whose revenues for the 12 months to 30th September were around $2.2bn. The group also includes LoyaltyOne, which owns and operates the AIR MILES Reward Program in Canada, and Netherlands-based grocery sector solutions firm BrandLoyalty.

Alliance has retained Evercore as a financial advisor, but as usual in such cases stresses that there is no assurance that a sale or any other significant change will result from the discussions. However it says that in the event of a sale, it intends to use the proceeds to 'deleverage' and to return capital to stockholders through share repurchases and/or dividends.

Alliance Data President and CEO Ed Heffernan (pictured) comments: 'Under Alliance Data, Epsilon has become a global leader in one-to-one marketing, utilizing the rare combination of scaled SKU-level transactional data, proprietary identity technologies, and proven people-based capabilities across enterprise-grade marketing and digital advertising technologies, all coupled with decades of orchestration expertise... We believe the time is right to explore alternatives for Epsilon under which Epsilon can reach its full potential'.

Last week, Epsilon appointed Paul Davies as its new SVP of Asia Pacific, based in Singapore; while its former CEO Andrew Frawley joined database and targeting firm V12 Data in August.

The firm employs more than 8,000 associates (about 40 percent of Alliance Data's total) in 70 offices worldwide, and is online at www.epsilon.com . The parent company's home page is at www.alliancedata.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.