DALLAS -- Alliance Data Systems Corp., a provider of loyalty and marketing solutions derived from transaction-rich data, said that it has entered into a definitive agreement to be acquired by Blackstone Capital Partners V LP, an affiliate of The Blackstone Group, in a transaction valued at approximately $7.8 billion, including the assumption of certain debt.
Under the terms of the agreement, Blackstone will acquire all of the outstanding common stock of Alliance Data for $81.75 per share in cash. The purchase price represents a premium of approximately 30% [image-nocss] over Alliance Data's closing share price of $62.96 on May 16, 2007. Senior leadership is expected to remain in place.
Following the unanimous recommendation of a special committee of the Alliance Data board, composed solely of independent directors, the board unanimously approved the agreement and has recommended that Alliance Data stockholders adopt the agreement. Completion of the transaction, which is currently expected to occur by yearend, is contingent upon customary closing conditions, including antitrust, other regulatory approvals and the approval of Alliance Data's stockholders, who will be asked to vote on the transaction at a special meeting.
There is no financing condition to the obligations of Blackstone to consummate the transaction, and equity and debt commitments for the full amount of the merger consideration have been received. It is currently anticipated that substantially all of Alliance Data's outstanding series A and series B senior notes will either be tendered for or repaid in connection with the transaction.
Banc of America Securities LLC and Lehman Brothers, Inc. served as financial advisors to Alliance Data and the special committee of the Alliance Data board in connection with the transaction, and Evercore Group LLC served as financial advisor to the special committee. Kirkland & Ellis LLP served as legal counsel to the special committee and Akin Gump Strauss Hauer & Feld LLP served as legal counsel to Alliance Data. Credit Suisse Securities (USA) LLC and Blackstone Corporate Advisory Services served as financial advisors to The Blackstone Group, and Simpson Thacher & Bartlett LLP served as its legal counsel.
Dallas-based Alliance Data provides marketing, loyalty and transaction services, managing more than 120 million consumer relationships for major North American companies. Using transaction-rich data, Alliance Data creates and manages customized solutions that change consumer behavior and that enable its clients to create and enhance customer loyalty to build stronger, mutually beneficial relationships with their customers, it said.
Alliance Data's brands include AIR MILES, a coalition loyalty program, and Epsilon, a provider of multi-channel, data-driven technologies and marketing services.
The Blackstone Group, New York, is a global alternative asset manager and provider of financial advisory services. Its alternative asset management businesses include the management of corporate private-equity funds, real-estate opportunity funds, funds of hedge funds, mezzanine funds, senior debt funds, proprietary hedge funds and closed-end mutual funds. The Blackstone Group also provides various financial advisory services, including mergers and acquisitions advisory, restructuring and reorganization advisory and fund placement services.
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