On Our Radar: Deals we are paying attention to for their impact on industry.
Alliance Data Systems Corp.’s Epsilon marketing unit has one confirmed and one reported bidder, and the Plano, Texas-based firm could choose one as early as this week, according to a Bloomberg report.
The potential buyers are French advertising giant Publicis Groupe SA, as well as Advent International Corp. and Goldman Sachs Group Inc. (the latter two in a joint effort), people familiar with the deal told Bloomberg.
Publicis Groupe confirmed earlier on Monday it is “studying” potential acquisition of North America-focused data and targeted marketing provider.
Alliance Data announced in November 2018 that it was “exploring strategic alternatives” for — including a potential sale of — its Epsilon business, which together with its digital media arm Conversant, generated $2.2 billion during 12 months ending on September 30.
It also said it would use proceeds from the sale to pay down debt and reward investors through a dividend or share buyback.
Epsilon uses data to help its clients customize advertisements to their customers. Its services span from loyalty programs to email marketing. Conversant collects consumer data including transactions, location and web activity.
Meanwhile, private equity interest in tapping the power of big data to evaluate potential investment targets and grow portfolio companies understandably continues to grow. According to Ernst & Young LLP’s Private equity Global Divestment Study 2018, 94% of PE firms say they will use more predictive analytics within the next two years, while 83% are seeking operating partners with digital or technology expertise.
TPG Capital, Two Six Capital, Oak Hill Capital Partners, and Clarion Capital Partners have all recently sealed deals with data and technology firms. In December 2018, Keystone Capital acquired MERGE, a marketing and technology services agency with more than 270 employees across offices in Chicago, Boston, and Atlanta, from Baird Capital.
Michelle Tay is an editor based in New York.