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Alliance Data Signs Definitive Agreement to Acquire Bread

Transaction Expands Alliance Data’s Digital Offerings to Include Installment and Buy Now, Pay Later Products

Alliance Data Systems Corporation, a leading provider of data-driven marketing, loyalty and payment solutions, announced it has signed a definitive agreement to acquire Bread, a technology-driven digital payments company offering an omnichannel solution for retailers and platform capabilities to bank partners. The transaction is valued at estimated consideration of $450 million, of which approximately $100 million is Alliance Data common stock. Subject to regulatory approval and customary closing conditions, the transaction is anticipated to close in Q4 2020 and expected to be accretive by no later than year three.

The point-of-sale technologies provided by Bread, which include popular installment and buy now, pay later solutions, have a proven record of driving growth for its clients. The addition of Bread’s technology platform expands Alliance Data’s payment offering to include pay-over-time products, expected to be available for Alliance Data brand partners soon.

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Upon closing of the transaction, Alliance Data will welcome Bread’s talented group of approximately 185 employees and more than 400 Bread installment loan or buy now, pay later clients.

“As part of our broader transformation efforts, the acquisition of Bread significantly expands our digital capabilities and payment options for our brand partners and their customers, while providing another reason for retailers and brands to choose Alliance Data to help them grow their businesses,” said Ralph Andretta, president and chief executive officer, Alliance Data. “Bread’s pay-over-time solutions, together with our robust existing private label, general purpose and commercial products, will further expand our breadth of payment options and capabilities, giving our brand partners across all verticals another way to capitalize on the rapidly growing e-commerce channel.”

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Bread’s flexible, easily-integrated payment solutions, coupled with Alliance Data’s Enhanced Digital Suite, will improve the digital customer experience and support increased acquisition and checkout rates, offering the best payment product to the right consumer at pivotal moments in the customer’s online shopping journey. With a diverse suite of payment products, Alliance Data will have an option for every customer need, while also appealing to younger, digitally native consumers.

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“With the timing of the holiday season upon us, the COVID-19 pandemic has accelerated the adoption of digital technologies, and perhaps nowhere as significantly as in financial services and payments,” said Val Greer, chief commercial officer, Alliance Data. “Digital payment offerings such as buy now, pay later, appeal to our brand partners’ younger, technology savvy shoppers seeking convenience, security and choice, and create more opportunities for retailers to drive sales and build brand loyalty among this coveted demographic.”

“At Bread, we’ve always strived to reimagine payments in the digital age, and we’re excited for the opportunity to provide Alliance Data with our technology, support and digital development expertise through this agreement,” said Josh Abramowitz, chief executive officer, Bread. “We look forward to helping an industry leader like Alliance Data grow its business by offering enhanced solutions for its clients and their customers.”

J.P. Morgan acted as financial advisor and Davis Polk as legal advisor to Alliance Data during the transaction. Centerview Partners LLC acted as financial advisor and Simpson Thacher & Bartlett acted as legal advisor to Bread during the transaction.

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