Alliance Data To Buy Conversant For $2.3 Bln. - Update

(RTTNews) - Alliance Data Systems Corp. (ADS) Thursday said it has agreed to buy digital marketing company Conversant Inc. (CNVR) for about $2.3 billion in a cash and stock deal. Shares of Conversant surged 33 percent in the after-hours trade, following the news.

Alliance Data, which provides data-driven marketing and loyalty solutions services, has agreed to pay Conversant shareholders $35 for each Conversant share held in a combination of 48 percent cash and rest in ADS shares. The offer represents a premium of 34 percent to the 30 day average closing price of Conversant stock.

Alliance Data expects "substantial accretion" to its core earnings from acquisition, expecting increase of $0.50 per share in the first year and $0.75 per share in the second year.

Alliance Data plans to fund the cash portion of the acquisition through a combination of existing cash on hand and availability under its credit facility.

The acquisition has been approved by the boards of both companies and now requires regulatory approvals. The company expects to close the deal by the end of the year, following which Conversant will operate as part of Epsilon business.

"The acquisition of Conversant establishes a truly unique end-to-end marketing services company that will empower clients to more effectively market to their customers across all channels," Alliance Data said in a statement.

CEO Ed Heffernan said, "The strategic and cultural fit of the two companies is ideal. Importantly, the acquisition "bulks up" Alliance Data in digital marketing, which is experiencing the fastest secular growth."

CNVR closed Thursday's trading at $26.71, up $0.04 or 0.15%, on the Nasdaq. The stock further gained $8.68 or 32.50% in after-hours trade.

ADS closed Thursday's trading at $252.87, down $6.34 or 2.45%, on the NYSE. The stock, however, gained $8.81 or 3.48%, in after-hours trade.