Welcome!

Mobile IoT Authors: Elizabeth White, Liz McMillan, Jeev Trika, Jayaram Krishnaswamy, Scott Allen

News Feed Item

Alliance Data's Epsilon Business To Acquire Hyper Marketing, One Of The Nation's Largest Digital Agencies

Combination with Existing Epsilon Assets Solidifies Next Gen Agency Model; Will Create Nation's Leading Digital Agency

DALLAS, Nov. 9, 2012 /PRNewswire/ -- Alliance Data Systems Corporation (NYSE: ADS), a leading provider of loyalty and marketing solutions derived from transaction-rich data, today announced that it has reached an agreement to acquire the Hyper Marketing ("HMI") group of companies, the largest privately held marketing services agency in the United States.

(Logo: http://photos.prnewswire.com/prnh/20051024/ADSLOGO)

HMI offers the full breadth of ROI-based marketing services through Ryan Partnership, CatapultRPM, SolutionSet and Getmembers.com, including: digital user experience design technology, specializing in websites, social media platforms and mobility; customer relationship marketing; consumer promotions marketing; direct and digital shopper marketing; distributed and local area marketing; and analytical services that include brand planning and consumer insights.  HMI is privately owned by Lake Capital and its affiliates, and has approximately 1,100 employees based primarily in Chicago, San Francisco and Wilton, Conn.

Strategic Fit:  Provides Digital Capabilities, New Verticals, Scale, and Top Talent

The $400 billion annual marketing spend in North America continues its secular shift away from traditional general advertising and toward measurable, ROI-based targeted marketing.  It is estimated that this latter market is now 50 percent of the total market and growing at a consistent mid to high-single-digit pace annually. 

The ability to successfully navigate and leverage the benefits of this vast and growing market requires a new breed of agency that focuses on building customer connections.  This agency model drives business performance through dynamic engagement and meaningful customer experience, and requires a number of critical capabilities. Epsilon is currently the only end-to-end solution offering the "critical five" capabilities that provide the optimal suite of solutions to capitalize on this secular shift, with a focus on meeting the changing set of needs at the CMO level:

  1. Strategy/creative – working with the C-Suite to conceptualize, develop and execute comprehensive brand marketing strategies focused on customer acquisition, retention and brand loyalty
  2. Data – providing clients with unique, proprietary insights into their customers' behaviors and channel preferences through transactional, demographic and psychographic data
  3. Database – processing significant amounts of consumer data and populating sophisticated loyalty and acquisition marketing platforms to enable dynamic marketing initiatives
  4. Analytics – using advanced analytic techniques to discern and optimize customer behavior
  5. Distribution – optimizing consumer targeting by leveraging all communications channels, including permission-based email, targeted display, mobile, social, direct mail and point-of-sale

The acquisition of HMI further expands and enhances Epsilon's current ROI-based marketing services, specifically:

Expansion into Key Industry Verticals:  Epsilon's previous agency acquisition, Aspen, added significant depth in automotive, telecom, and consumer product goods (CPG).  HMI will add additional scale and capabilities to CPG, telecom, retail and financial services, as well as expand into other key verticals such as energy, fitness, quick service restaurants (QSR) and technology.

Increases Critical Scale:  While Epsilon currently has critical mass in all five above areas, the acquisition of HMI will essentially double the size of Epsilon's agency offering.  As such, Epsilon will have far more strategic resources to interact with and assist C-Suite executives, thus enhancing the potential for offering adjacent and complementary services through a "one-stop shop."

Adding to Blue Chip Client Roster:  HMI brings an enviable roster of leading global brands, including Mars, Unilever, The Home Depot, and Kellogg, with top clients showing longstanding tenure of more than seven years.

Expands Digital Capabilities:  Epsilon's 45 billion plus permission-based email circulation numbers make it a top tier player in this important part of the digital spectrum.  HMI allows Epsilon to further expand capabilities in key digital channels including mobile, social, targeted display, tablet and web development,  and importantly, in the user experience design and creative services that are essential to create compelling content and applications for these channels.

Adds Key Talent:  Led by industry veteran Zain Raj, HMI has a deep "bench" of tenured and experienced talent.  Epsilon and Alliance Data are excited about the fit and synergies associated with HMI's management and capabilities, including the opportunity to further drive growth across the combined businesses.

Financial Rationale:  In 2013, HMI is expected to generate approximately $300 million in revenues and $50 million in EBITDA.  It has demonstrated a strong track record of organic growth, averaging in the high-single digits during the past few years.  This organic growth rate is expected to continue going forward, equating to approximately 3 times expected GDP growth trends.  Total consideration to be paid for HMI and existing obligations will be approximately $460 million, subject to working capital and other adjustments, or a multiple slightly over 9 times EBITDA.  The transaction is expected to be accretive to both GAAP and Core EPS in 2013, and 2013 guidance will be updated accordingly when Alliance Data releases its 2012 full year results. Closing is expected before year-end, subject to customary closing conditions and regulatory approval.

Leading Digital Agency:  Epsilon's 2013 revenue is expected to jump to $1.3 billion following the acquisition of HMI.  The powerful combination of agency and digital assets ("digital agency") will be approximately $500 million and, based upon published rankings, Epsilon's digital agency is expected to be among the leading global agencies on a pro-forma basis.

Bryan Kennedy, president of Epsilon, commented, "HMI will be a well-received addition to the Epsilon family as we formalize our 'agency of the future' model.  By bringing in expertise in new verticals, adding notable scale to existing verticals and, as importantly, providing us with critical mass across the entire digital asset spectrum, we're confident that there will be no other company out there that can deliver what Epsilon can now offer to today's C-Suite.  I'm also looking forward to welcoming HMI's highly talented associates to the Epsilon family."

Zain Raj, chief executive officer of HMI, stated, "Hyper Marketing's culture revolves around our clients – everything we do is designed to help deliver profitable growth while building value in their brands.  Combining HMI with Epsilon will help us provide broader and deeper solutions to our clients in a way that reflects the ongoing evolution of the marketing landscape.  Our team is particularly excited about the shared values between our organizations. We're  each a highly client-centric culture that delivers unmatched service.  Finally, our complementary strengths across capabilities and verticals will enable our clients to choose a single partner for more of their marketing needs, ensuring a smooth ride all the way from strategy to execution without the frustrating 'hand-offs' of yesterday's fragmented marketing model."

Added Ed Heffernan, Alliance Data president and chief executive officer, "We're looking at another strong year of organic growth across all three businesses.  Additionally, we've traditionally added a tuck-in acquisition here and there when it makes sense. We looked at well over 50 companies this year, got serious about half a dozen of them, and chose only one, HMI."  Heffernan continued, "I would expect Epsilon to represent about a third of Alliance Data's topline in 2013, and it will have a long runway left to expand – should be another fun year."

BofA Merrill Lynch acted as financial advisor to HMI on the transaction.

About Epsilon
Epsilon is the global leader in delivering direct-to-customer connections that drive business performance. Epsilon's integrated solutions leverage the power of rich transactional and demographic marketing data, strategic insights, analytics, award-winning creative and robust digital and database marketing technologies to connect brands with consumers both online and offline, increasing engagement to generate measurable marketing outcomes.  Founded in 1969, Epsilon works with over 2,000 global clients and employs over 3,500 associates in 37 offices worldwide. For more information, visit www.epsilon.com, follow us on Twitter @EpsilonMktg or call 1.800.309.0505.

About Alliance Data
Alliance Data® (NYSE:ADS) and its combined businesses is North America's largest and most comprehensive provider of transaction-based, data-driven marketing and loyalty solutions serving large, consumer-based industries. The Company creates and deploys customized solutions, enhancing the critical customer marketing experience; the result is measurably changing consumer behavior while driving business growth and profitability for some of today's most recognizable brands. Alliance Data helps its clients create and increase customer loyalty through solutions that engage millions of customers each day across multiple touch points using traditional, digital, mobile and other emerging technologies. Headquartered in Dallas, Alliance Data employs nearly 9,000 associates at more than 50 locations worldwide.

Alliance Data is a leading provider of marketing-driven credit solutions, and is the parent company of Epsilon®, a leading provider of multi-channel, data-driven technologies and marketing services, and LoyaltyOne®, which owns and operates the AIR MILES® Reward Program, Canada's premier coalition loyalty program. For more information about the company, visit our web site, www.AllianceData.com, or you can follow us on Twitter at www.Twitter.com/AllianceData.

About HMI
Hyper Marketing is a global company and the largest independent marketing-services network in North America. The company has 1,100 employees in 23 offices, with expertise in digital, direct, data, promotions, shopper marketing, Hispanic, and media buying and planning. HMI focuses on driving transactions by responding to changing consumer behavior in a hyper-connected world. HMI companies partner with CMO's of many of the world's best known brands including Dell, eBay, Kellogg's, Office Depot, The Home Depot and Unilever to develop integrated programs that deliver profitable results. For more information visit www.hypermarketinginc.com.

About Lake Capital
Lake Capital is a private equity firm that focuses on investments in service-based enterprises across various industries.  The firm currently manages more than $1.3 billion in equity commitments and seeks to build leading services companies through organic and acquisition-enhanced growth.  More information about Lake Capital is available at www.lakecapital.com.  

Alliance Data's Safe Harbor Statement/Forward Looking Statements
This 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 presentation 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, except as required by law.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this presentation regarding Alliance Data Systems Corporation's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report on Form 10-K for the most recently ended fiscal year. Risk factors may be updated in Item 1A in each of the Company's Quarterly Reports on Form 10-Q for each quarterly period subsequent to the Company's most recent Form 10-K.

SOURCE Alliance Data Systems Corporation

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
Customer experience has become a competitive differentiator for companies, and it’s imperative that brands seamlessly connect the customer journey across all platforms. With the continued explosion of IoT, join us for a look at how to build a winning digital foundation in the connected era – today and in the future. In his session at @ThingsExpo, Chris Nguyen, Group Product Marketing Manager at Adobe, will discuss how to successfully leverage mobile, rapidly deploy content, capture real-time d...
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in Embedded and IoT solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology, is a premier provider of advanced server Building Block Solutions® for Data Center, Cloud Computing, Enterprise IT, Hadoop/Big Data, HPC and ...
18th Cloud Expo, taking place June 7-9, 2016, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterprises are using some...
What a difference a year makes. Organizations aren’t just talking about IoT possibilities, it is now baked into their core business strategy. With IoT, billions of devices generating data from different companies on different networks around the globe need to interact. From efficiency to better customer insights to completely new business models, IoT will turn traditional business models upside down. In the new customer-centric age, the key to success is delivering critical services and apps wit...
Join us at Cloud Expo | @ThingsExpo 2016 – June 7-9 at the Javits Center in New York City and November 1-3 at the Santa Clara Convention Center in Santa Clara, CA – and deliver your unique message in a way that is striking and unforgettable by taking advantage of SYS-CON's unmatched high-impact, result-driven event / media packages.
As cloud and storage projections continue to rise, the number of organizations moving to the cloud is escalating and it is clear cloud storage is here to stay. However, is it secure? Data is the lifeblood for government entities, countries, cloud service providers and enterprises alike and losing or exposing that data can have disastrous results. There are new concepts for data storage on the horizon that will deliver secure solutions for storing and moving sensitive data around the world. ...
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, will provide an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life ...
SYS-CON Events announced today that IBM Cloud Data Services has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. IBM Cloud Data Services offers a portfolio of integrated, best-of-breed cloud data services for developers focused on mobile computing and analytics use cases.
Cloud computing delivers on-demand resources that provide businesses with flexibility and cost-savings. The challenge in moving workloads to the cloud has been the cost and complexity of ensuring the initial and ongoing security and regulatory (PCI, HIPAA, FFIEC) compliance across private and public clouds. Manual security compliance is slow, prone to human error, and represents over 50% of the cost of managing cloud applications. Determining how to automate cloud security compliance is critical...
SYS-CON Events announced today that MobiDev will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. MobiDev is a software company that develops and delivers turn-key mobile apps, websites, web services, and complex software systems for startups and enterprises. Since 2009 it has grown from a small group of passionate engineers and business managers to a full-scale mobile software company with over 200 develope...
SoftLayer operates a global cloud infrastructure platform built for Internet scale. With a global footprint of data centers and network points of presence, SoftLayer provides infrastructure as a service to leading-edge customers ranging from Web startups to global enterprises. SoftLayer's modular architecture, full-featured API, and sophisticated automation provide unparalleled performance and control. Its flexible unified platform seamlessly spans physical and virtual devices linked via a world...
SYS-CON Events announced today that BMC Software has been named "Siver Sponsor" of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. BMC is a global leader in innovative software solutions that help businesses transform into digital enterprises for the ultimate competitive advantage. BMC Digital Enterprise Management is a set of innovative IT solutions designed to make digital business fast, seamless, and optimized from mainframe to mo...
"What we see what happens when you have a completely networked society and the potential to now drive the value creation and the collaboration and the ecosystems that are possible when you start to be able to connect people and industries together in ways that have never been possible before," explained Esmeralda Swartz, VP of Marketing Enterprise & Cloud at Ericsson, in this SYS-CON.tv interview at @ThingsExpo, held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA.
Companies can harness IoT and predictive analytics to sustain business continuity; predict and manage site performance during emergencies; minimize expensive reactive maintenance; and forecast equipment and maintenance budgets and expenditures. Providing cost-effective, uninterrupted service is challenging, particularly for organizations with geographically dispersed operations.
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data...
The IoTs will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm and share the must-have mindsets for removing complexity from the development proc...
SYS-CON Events announced today that MangoApps will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. MangoApps provides modern company intranets and team collaboration software, allowing workers to stay connected and productive from anywhere in the world and from any device. For more information, please visit https://www.mangoapps.com/.
SYS-CON Events announced today TechTarget has been named “Media Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. TechTarget is the Web’s leading destination for serious technology buyers researching and making enterprise technology decisions. Its extensive global networ...
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management...
The essence of data analysis involves setting up data pipelines that consist of several operations that are chained together – starting from data collection, data quality checks, data integration, data analysis and data visualization (including the setting up of interaction paths in that visualization). In our opinion, the challenges stem from the technology diversity at each stage of the data pipeline as well as the lack of process around the analysis.