Alliance Data Systems, a leading provider of transaction, credit and marketing services, announced it has reached an agreement to acquire Epsilon Data Management, Inc. ("Epsilon"), a leading provider of integrated direct marketing solutions that combine value-added marketing, transaction, technology and analytical services. Total consideration is expected to be approximately $300 million, representing approximately 2.5 times Epsilon's expected core revenues. The transaction is expected to close during the fourth quarter of 2004.
For more than 35 years, Epsilon has been a recognized leader in providing customer management and loyalty solutions. The company utilizes database technologies and analytics to maximize the value, growth and loyalty of its clients' customers and assists clients in acquiring new customer relationships. Epsilon's clients include global brands such as Hilton Hotels, Principal Financial Group, Pfizer, Nestle Purina PetCare Company, AstraZeneca and Midas. Its 200 client programs primarily focus on five general business sectors: financial/insurance, telecom/hi-tech, travel/consumer, healthcare and not-for-profit. Its top 25 clients, representing the vast bulk of its revenues, have an average tenure of nearly 10 years. Mike Iaccarino, president and chief executive officer of Epsilon, will continue in his current role.
Epsilon has approximately 700 employees located in Boston, Dallas, St. Louis, and Washington, D.C. Epsilon provides customized loyalty marketing management programs for multichannel campaigns that affect customer behavior and enhance loyalty. Additionally, Epsilon's technology services include designing, building and managing customer loyalty databases, supporting millions of customers. Epsilon also provides analytical services (segmentation, response modeling, lifetime value), which assist the client in optimizing customer value, and statement generation/back-end processing functions.
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