|Shares Out. (in M):||0||P/E|
|Market Cap (in $M):||2,986||P/FCF|
|Net Debt (in $M):||0||EBIT||0||0|
Sign up for free guest access to view investment idea with a 45 days delay.
Market Cap $2.99bn
Enterprise Value $4.21bn
Revenue (2008e) $2.05bn
Adjusted EBITDA (2008e) $654.0mn
Shares Out 66mn (9/30/08)
Avg Daily Volume (3 mo.) 1.6mn shares
% Short 14.0% (11/24/08)
Alliance Data Systems was formed in 1996 as the result of Welsh Carson Anderson & Stowe’s merging two of its portfolio companies, JC Penney’s transaction services business and The Limited’s credit card bank operation, World Financial Network National Bank. The company issued public shares in 2001.
The Company operates in 4 distinct segments:
Services (~33% revenue, 31% EBITDA)
In May 2007 Alliance Data Systems entered into an Agreement and Plan of Merger with Aladdin Solutions, an affiliate of The Blackstone Group, pursuant to which the Company was to be acquired for $81.75 per share. In January 2008 Aladdin sent the Company written notice that it did not believe that the Office of the Comptroller of the Currency would give necessary approvals to the transaction. As a result the Company filed a suit against Aladdin and Blackstone seeking a $170 million (~$2.50/share) Business Interruption Fee as defined in the Agreement.
Industry Overview- Loyalty services competes somewhat with Aeroplan coalition loyalty program (though Aeroplan focuses on business customers rather than consumers) and individual company loyalty plans in Canada; dominant market position
Investment Thesis- Market values company based on private label credit despite being less than 1/3 of cash flow currently (and even less in subsequent periods)
Risks- Economic slowdown could slow signing of new clients to programs
Historical Financial Performance:
(From ADS 3Q ’08 Presentation)
Blended target of $67.00 based on Comparables and Discounted Cash Flow Analysis
Discounted Cash Flow Analysis
continued credit headwinds (i.e. increased net charge- offs to 10.5% from
6.5% in 2008) and compromised growth through 2010 as experienced in 2008
|show sort by|
Are you sure you want to close this position Alliance Data Systems?
By closing position, I’m notifying VIC Members that at today’s market price, I no longer am recommending this position.
Are you sure you want to Flag this idea Alliance Data Systems for removal?
Flagging an idea indicates that the idea does not meet the standards of the club and you believe it should be removed from the site. Once a threshold has been reached the idea will be removed.
You currently do not have message posting privilages, there are 1 way you can get the privilage.
Apply for or reactivate your full membership
You can apply for full membership by submitting an investment idea of your own. Or if you are in reactivation status, you need to reactivate your full membership.
What is wrong with message, "".