DALLAS, Sept. 8 /PRNewswire-FirstCall/ -- Alliance Data Systems Corp.
(NYSE: ADS), a leading provider of transaction services, credit services and
marketing services, today announced that through its Epsilon subsidiary, it
has reached an agreement to acquire Bigfoot Interactive. Based in New York
City, Bigfoot Interactive is a leading full-service provider of strategic ROI-
focused email communications and marketing automation solutions with
approximately 85 full-time employees, all of whom are expected to remain as
part of the transaction. Bigfoot Interactive's management will play a key
role in Epsilon's business as well as in the continued development and
expansion of Alliance Data's growing loyalty and marketing services in North
America. Representing approximately 165 brands and divisions across its
client base, Bigfoot Interactive has a strong presence in the financial
services sector (clients include JPMorgan Chase & Co., Capital One and
Discover Financial Services), and in the retail sector (Amazon Services,
Target and Expedia).
Currently, the Canadian AIR MILES(R) Reward Program comprises the majority
of Alliance Data's growing Marketing Services segment, with Epsilon serving as
Alliance Data's U.S. marketing platform. Upon closing, Bigfoot Interactive
plans to be known as Epsilon Interactive and will serve as Epsilon's key
offering in the interactive marketing and communications space.
Identified by Forrester and JupiterResearch as a market leader among email
marketing services providers, Bigfoot Interactive helps its clients acquire,
grow and retain profitable customer relationships through large-scale, highly
relevant and permission-based email communications. Specifically, Bigfoot
Interactive receives customer data from its clients and develops highly
targeted and automated email campaigns that generate measurable results and
marketing ROI.
The benefits Alliance Data expects to realize from this acquisition
include:
* A stronger presence for Epsilon in both the financial and retail
verticals;
* A new capability for Epsilon to provide large-scale, highly targeted
email communications and marketing integration, and automation
solutions;
* An industry-leading, integrated real-time marketing platform capable
of delivering segmented and highly customized programs across multiple
channels: direct mail, email and call center;
* Expanded capabilities focused around the growing market need for
integrated email/direct mail customer optimization services and
solutions, which can be offered to Epsilon's and Alliance Data's
existing clients.
Total consideration for the transaction is expected to be approximately
$120 million. The acquisition is anticipated to close this fall. Annual
revenues of Bigfoot Interactive are approximately $30 million and growing
rapidly, with EBITDA margins in excess of those at Alliance Data today. The
deal is expected to be slightly accretive to cash earnings and neutral to GAAP
earnings during 2006, with increasing accretion expected thereafter, resulting
from anticipated growth of the business and planned deleveraging from strong
cash flow generation.
"We are excited about this strategic acquisition and are pleased to
welcome Bigfoot Interactive employees to Epsilon as well as to the Alliance
Data family," said Mike Iaccarino, president of Epsilon. "Bigfoot Interactive
brings with it attractive leveragability and a business model that addresses
both the significant demand for, and the market's rapid growth of, multi-
channel marketing services, technologies and database solutions that help
marketers optimize customer relationships and marketing return on investment.
With Bigfoot Interactive's solutions and highly experienced staff, we have
further enhanced our competitive advantage that will expand Epsilon's
comprehensive offering and will further strengthen our leadership position in
the industry."
With the close of the transaction, Al DiGuido, chief executive officer of
Bigfoot Interactive, will serve as president of Epsilon Interactive. "We are
extremely excited to be part of the Alliance Data Systems and Epsilon family.
We all believe that the marketing service leaders of tomorrow will be defined
by their ability to help marketers efficiently leverage customer data,
knowledge and communication channels to produce timely, relevant, and
integrated dialogues with key prospects and customers. This combined product
and service offering gives marketers access to the most comprehensive customer
optimization solutions available under a single brand. We look forward to
building the new benchmark organization in marketing services for many years
to come."
John Scullion, president of Alliance Data's Loyalty and Marketing
Services, said, "This acquisition of Bigfoot Interactive is a testament to
Alliance Data's continued focus on building our loyalty and marketing business
into one of the largest and most sophisticated offerings in North America."
Bigfoot Interactive was advised by Petsky Prunier LLC.
About Epsilon
Alliance's Epsilon business unit is a leading relationship marketing
company that helps clients create measurable business results through
integrated marketing services. Epsilon is committed to maximizing the value,
growth and loyalty of clients' customer and prospect portfolios through core
services including data analysis, multi-channel direct communications and
database marketing. Epsilon services enable clients to build enduring customer
relationships by identifying marketing opportunities and creating actionable
customer insight. Founded in 1969, Epsilon maintains offices in Boston,
Dallas, St. Louis and Washington, D.C. Alliance Data Systems acquired Epsilon
in 2004.
For more about Epsilon, see http://www.epsilon.com.
About Alliance Data Systems
Alliance Data Systems is a leading provider of transaction services,
credit services and marketing services, managing over 105 million consumer
relationships for some of North America's most recognizable companies.
Alliance creates and manages customized solutions that change consumer
behavior and that enable its clients to build stronger, mutually beneficial
relationships with their customers. Headquartered in Dallas, Alliance Data
Systems employs approximately 7,500 associates at 35 locations in the United
States and Canada. For more information about the company, visit its web site,
http://www.AllianceDataSystems.com.
About Bigfoot Interactive
Bigfoot Interactive (http://www.bigfootinteractive.com) is the leading
provider of strategic, ROI-focused email communications solutions and
marketing automation technologies. Through its combination of innovative
technologies, professional services and vertical market expertise, Bigfoot
Interactive helps marketers acquire, grow and retain profitable customer
relationships through highly relevant and personalized email communications.
The company's end-to-end suite of industry-specific products and services
includes scalable email campaign technology, delivery optimization, marketing
automation tools, turnkey integration solutions, strategic consulting, and
creative expertise to produce email programs that generate measurable results
throughout the customer lifecycle.
Since 1997, Bigfoot Interactive has developed successful permission-based
email programs for more than 150 top companies, including Expedia, American
Honda Motor Co. and The Washington Post/Newsweek Interactive. Privately held
and based in New York, the company's investors include JPMorgan Partners,
Flatiron Partners, Hudson Ventures, Mitsui & Co., Grey Ventures, HPJ Media
Ventures and Syndicat Technologies.
Alliance Data Systems' Safe Harbor Statement/Forward Looking Statements
This news release may contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Such statements may
use words such as "anticipate," "believe," "estimate," "expect," "intend,"
"predict," "project" and similar expressions as they relate to us or our
management. When we make forward-looking statements, we are basing them on our
management's beliefs and assumptions, using information currently available to
us. Although we believe that the expectations reflected in the forward-looking
statements are reasonable, these forward-looking statements are subject to
risks, uncertainties and assumptions, including those discussed in our filings
with the Securities and Exchange Commission.
If one or more of these or other risks or uncertainties materialize, or if
our underlying assumptions prove to be incorrect, actual results may vary
materially from what we projected. Any forward-looking statements contained in
this news release reflect our current views with respect to future events and
are subject to these and other risks, uncertainties and assumptions relating
to our operations, results of operations, growth strategy and liquidity. We
have no intention, and disclaim any obligation, to update or revise any
forward-looking statements, whether as a result of new information, future
results or otherwise.
Contact:
Alliance Data Systems
Ed Heffernan
Analysts/Investors
972.348.5196
eheff@alldata.net
Shelley Whiddon - Media
972.348.4310
swhiddon@alldata.net
SOURCE Alliance Data Systems Corp.
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Related links:
http://www.alliancedatasystems.com
http://www.bigfootinteractive.com http://www.epsilon.com
CONTACT:
Ed Heffernan, Analysts/Investors,
+1-972-348-5196, eheff@alldata.net; or Shelley Whiddon, Media,
+1-972-348-4310, swhiddon@alldata.net, both of Alliance Data
Systems Corp.
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