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Alliance Data Spends $2.3 Billion to Buy Conversant

Alliance Data Systems, which owns Loyalty One—administrator of Canada’s Air Miles program—and digital marketing power Epsilon, today added a lead player in customer personalization by agreeing to acquire Conversant Inc. for around $2.3 billion. The purchase value was a combination of cash and stock.

In a statement announcing the deal, company management expressed that Conversant completes a loop that makes Alliance an “end-to-end marketing services company” comprising data services, analytics, omnichannel distribution, and metrics. The company feels that Conversant bulks up its data warehouse while increasing its cross-mobile device capabilities and cross-channel technology profile.

Conversant’s deep customer data files and experience in personalization is expected to enrich the targeting prowess of Epsilon and give it new stature in the marketplace. “Within targeted display, the combined company will be viewed as an agnostic niche player rather than as a potential competitor, as some of the industry giants are now viewed,” the statement proposed.

“The acquisition bulks up Alliance Data in digital marketing, which is experiencing the fastest secular growth,” said Alliance Data CEO Ed Heffernan (pictured above).

Epsilon CEO Bryan Kennedy commented that Conversant moves his company farther along on its goal of serving as a one-stop shop for CMOs. “The addition of Conversant’s capabilities…creates a truly unique global powerhouse in Epsilon,” he said. “Combined, I expect the segment to generate north of $2 billion in revenues.”

Dallas-based Alliance Data recorded revenues of $4.3 billion and earnings of $669 million in 2013, both in the area of 20% increases. This year, it was recognized as one of Fortune Magazine‘s “Most Admired Companies.”

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