Alliance Data to buy another DoubleClick division

Company scoops up Abacus data management and analytics arm for $435 million

Transaction services provider Alliance Data Systems Corp. is to buy DoubleClick Inc.'s Abacus data management and analytical division for around US$435 million in cash. It will be the second time within a year that Alliance Data has purchased technology from the privately-held online advertising firm.

Alliance Data announced Thursday that its Epsilon unit has agreed to acquire Abacus and, subject to regulatory approval, hopes to close the purchase in the first quarter of 2007.

The deal will enable Epsilon to expand its range of data, database and analytics products as well as boost its customer base and grow its presence in Europe, Alliance Data said.

Abacus has a particular focus on the retail and catalog industry and provides software and services designed to help companies both acquire and retain customers. Alliance Data plans to make the Abacus technologies available to its customers in other industries including financial services, insurance, pharmaceuticals and travel.

The move is the latest in a string of acquisitions Alliance Data has made to both broaden and deepen Epsilon's marketing services including buys earlier this year of CPC Associates and Big Designs.

In April, Epsilon completed its $90 million acquisition of DoubleClick's e-mail solutions business to build up its Epsilon Interactive e-mail marketing services unit.

Alliance Data expects the entire 525-strong Abacus work force to become part of Epsilon and intends to retain the Abacus name as a subset of the Epsilon brand.

Abacus with offices in Lafayette, Colorado; Schaumburg, Illinois; and in the U.K., has more than 1,500 customers including Brookstone and Patagonia. The company manages over 5 billion consumer transactions and more than 1.2 billion business-to-business (B2B) transactions through its databases.

Online advertising company DoubleClick struggled to remain competitive in recent years against the likes of Google Inc. and Yahoo Inc. and in October 2004 hired an investment bank to advise it on its future. U.S. private equity firms Hellman and Friedman LLC and JMI Equity then acquired DoubleClick in July 2005 for $1.1 billion.

Copyright © 2006 IDG Communications, Inc.