Epsilon to Acquire Abacus

Epsilon, a business unit of Alliance Data Systems, reached an agreement to purchase Lafayette, CO-based co-op database services provider Abacus, a division of DoubleClick, in a $435 million cash deal that is expected to close in the first quarter of 2007.

Abacus’ approximately 525 employees, including senior management, will be integrated into Epsilon, and its services will continue to carry the Abacus name. Dallas-based Epsilon builds and manages databases and loyalty programs, manages e-mail marketing programs, creates and manages direct mail programs, and provides data to support direct marketing campaigns and analysis.

Michael Iaccarino, president and CEO of Epsilon, said Abacus’ offering complements, expands, and strengthens Epsilon’s core offerings, and provides additional balance to its data services, strategic database services, and analytics offerings, which are three of Epsilon’s five key components.

Iaccarino said Abacus will be run separately as a retail solutions unit, and that Epsilon’s clients will have access to the Abacus database. In return, Abacus users will have access to survey information conducted by Epsilon.

“They have always been of interest to us, but the talks have only been serious for about the past two months,” Iaccarino said. “We think Abacus is the crown jewel of the co-ops, with a deeper, richer file than its competitors, and with a better business model.”

Iaccarino added that Abacus clients would also be able to benefit from Epsilon’s recently built new movers file, which contains 1.5 million to 2 million names per month from about 400 sources.

In a smaller deal in February, Epsilon acquired DoubleClick’s Email Solutions operating unit for approximately $90 million, and integrated it into its Epsilon Interactive operating unit and brand.

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