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Alliance Data Systems Corporation (NYSE:ADS), a leading provider of transaction services, credit services and marketing services, today announced that its Epsilon unit has agreed to acquire Abacus, a division of DoubleClick Inc. Abacus is a leading provider of data, data management and analytical services for the retail and catalog industry, as well as other sectors. The acquisition is expected to close in the first quarter of 2007, following regulatory approval.
Alliance Data expects the acquisition to be a minimum of $0.05 accretive to cash EPS in 2007 and neutral to GAAP earnings. Accretion will accelerate thereafter due to both growth in the business and the de-leveraging of acquisition debt. Total consideration is expected to be approximately $435 million in cash, representing a multiple roughly equal to Alliance Data's current multiple of EBITDA. Abacus' current EBITDA margins are in excess of Alliance Data's overall margins. Abacus' approximately 525 employees, including senior management, will be integrated into Epsilon and its services will continue to carry the Abacus name under the Epsilon brand.
The acquisition further cements Alliance Data's confidence in continuing its strong track record of meeting or exceeding its model of top-line growth in the low teens, EBITDA growth in the mid teens, and cash EPS growth in the high teens. Additionally, plans for 2007 include double-digit organic growth, even in the face of very high 2006 comparisons in private label services.
Abacus
Founded in 1990, Abacus has offices in Lafayette, CO; Schaumburg, IL; and the United Kingdom and is a leading provider of data, data management and analytical services geared toward optimizing customer acquisition and retention efforts. Abacus' products and services include consumer and business cooperative databases containing rich transactional data, custom marketing database design and management, and analytics services. These are used by more than...