Blackstone Makes $7.8B Deal for Alliance

Private equity continues to pour into financial processing
By J. Kelman
Posted May 17, 2007 2:55 PM CDT
Blackstone Makes $7.8B Deal for Alliance
Signs for MasterCard and American Express are posted outside a New York parking garage in a file photo from April 26, 2006. MasterCard Inc., the world's second-biggest credit card franchise, on Wednesday, May 2, 2007 reported favorable currency exchanges and stronger use of its brand overseas pushed...   (Associated Press)

Blackstone has snapped up credit card services provider Alliance Data for $7.8 billion, joining a surge of private equity into dull but profitable back-office firms. The 30% above-market offer for Alliance, which also runs a data processing unit, is the latest in a wave of takeovers in the financial-processing sector that started with KKR's April bid for First Data.

Dallas-based Alliance originally went public only six years ago. Today's deal to turn the company private, which includes more than $1 billion in debt, will allow senior management to stay on, Bloomberg reports. Shares in Alliance rose 25% to $78.49, close to Blackstone's $81.75 a share offer, in afternoon trading. (More Blackstone Group stories.)

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