Blackstone Group to acquire business services company

NEW YORK — Blackstone Group said Thursday that it would purchase Alliance Data Systems Corp. for $6.76 billion. It would be the second business services company buyout this week by a private equity firm.

Blackstone would pay $81.75 a share in cash, a premium of about 30% over Alliance Data’s closing share price of $62.96 on Wednesday.

Dallas-based Alliance Data is a business services company providing transaction, credit and marketing services, an industry that has attracted heavy interest from private equity buyers lately.

Payment processor First Data Corp. agreed to be bought by Kohlberg Kravis Roberts & Co. last month for $26 billion.

GTCR Golder Rauner said Monday that it would sell TransFirst, a payment-services company, to fellow buyout firm Welsh, Carson, Anderson & Stowe for $683 million.

Buyout firms are attracted to the sector because the businesses produce large amounts of cash flow.

Private equity firms usually borrow two-thirds of the money to make their purchases, and they need the cash to keep up interest payments.

Buyout firms typically purchase controlling stakes in companies, cut costs, restructure the businesses and sell them two to four years later.

Alliance Data’s shares climbed $15.50, or 24.6%, to $78.46.

Alliance Data provides marketing, loyalty and transaction services, managing more than 120 million consumer relationships, according to the company.

It employs more than 9,000 people at more than 60 locations worldwide.