- Alliance Data Systems (NYSE:ADS) plans to spin off its LoyaltyOne segment, comprising its Canadian Air Miles Reward Program and Netherlands-based BrandLoyalty business, in a move that will allow ADS to pay off some corporate debt.
- Immediately after the transaction, ADS stockholders will own shares in both companies with Alliance Data keeping a minority stake in the loyalty business.
- "The spinoff is expected to be tax-free, resulting in two independent, U.S.-based, publicly traded companies, Alliance Data and 'Spinco,' positioned to pursue their respective unique growth opportunities and build long-term value," the company said.
- ADS stock rises 0.9% in premarket trading.
- At the time of the spinoff, Spinco expects to complete a debt financing, with the net proceeds going to ADS as a dividend. ADS will use those proceeds to retire a portion of its corporate debt.
- The company expects the spinoff to be completed by the end of the year.