Alliance Data to buy Conversant for $2.3 billion

(Reuters) - Credit card processor Alliance Data Systems Corp ADS.N said it will buy Conversant Inc CNVR.O for about $2.3 billion in cash and stock to boost its digital marketing business.

The $35 per share offer comprises $16.80 in cash and the rest in stock, based on a fixed exchange ratio, Alliance Data said.

The offer represents a 31 percent premium to Conversant’s stock price on the Nasdaq before its trading was halted on Thursday.

Shares of Conversant, formerly known as ValueClick, were trading at $35.50 after markets closed. Alliance shares were up 3.5 percent in extended trading.

Conversant will be part of Epsilon, Alliance Data's online marketing unit that has partnered with Twitter Inc TWTR.N and Facebook Inc FB.O to help advertisers better target customers through loyalty programs.

Alliance said it expects Epsilon to generate about 35 percent — or more than $2 billion — of revenue and more than 500 million in adjusted earnings before interests, tax, depreciation and amortization, following the acquisition.

The Dallas, Texas-based company also expects the acquisition to add about 50 cents to core earnings per share in the first year after the deal’s close and about 75 cents in the next, excluding transaction costs.

The deal is subject to regulatory approval and is expected to close by the year-end.

Reporting by Amrutha Gayathri in Bangalore; Editing by Joyjeet Das