Private equity groups to buy database giants Alliance Data, Acxiom

Private equity turned its attention to direct marketing yesterday with the announced acquisitions of Alliance Data Systems Corp. and Acxiom Corp. for deals worth a combined $10.8 billion.

The deals were made public the same day British agency conglomerate WPP Group plc said it would acquire 24/7 Real Media, an online ad-serving giant whose closest rival DoubleClick is soon to become part of Google Inc.

“An unbiased eye is looking at public companies and their operating margins and cash flow is very attractive,” said Chris Paradysz, CEO of ParadyzsMatera, a leading direct marketing services company in New York.

Alliance Data, Dallas-based parent of e-mail and database services specialist Epsilon and the Air Miles loyalty program, agreed to sell to Blackstone Capital Partners V LP – a unit of upper-echelon asset manager Blackstone Group. The deal is valued at $7.8 billion, including debt.

“Alliance Data is a true leader in loyalty and marketing solutions and we believe that management’s demonstrated track record of continued growth combined with Blackstone’s investment expertise and industry experience will create a powerful partnership,” Chip Schorr, senior managing director at Blackstone, New York, said in a statement.

The transaction is expected to close by year’s end, pending antitrust, regulatory and other closing conditions.

At $3 billion, Acxiom’s was the smaller of the two database-company deals. Investment firms Silver Lake and ValueAct Capital have agreed to pay $3 billion in cash for Acxiom, a 37-year-old company known for its Customer Data Integration technology.

According to the merger agreement, Acxiom, Little Rock, AR, has the right to invite rival proposals from other suitors in the next 60 days.

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