Buy-Now-Pay-Later (BNPL) oriented fintechs have seen a big year in funding rounds resulting in sky-rocketing valuations across the board. The latest company to join the slew of headlines is Bread.
This week, Alliance Data, the leading provider of data-driven marketing, loyalty, and payment solutions, announced that it will be acquiring Bread, a technology-driven digital payments company offering an omnichannel solution for retailers, and platform capabilities to bank partners.
While subject to regulatory approvals, the deal has been valued at $450 million, with Alliance Data expecting that the deal will increase its earnings per share by 2023. $100 million of the deal will be comprised of Alliance Data common stock.
With the deal expected to close by the end of this quarter, it has been shared that Bread’s team of 185 staff will transfer over to Alliance Data with continued work joining a business that already employs over 8,500 associates at over 50 global locations. Alongside staff transition, Bread’s roster of over 400 corporate, installment loan, and BNPL later clients will also be transferred to Alliance data.
Until now, Ohio-based Alliance has been known for its ability to create and deploy customized solutions that measurably change consumer behavior, while driving business growth and profitability through its data-driven marketing and payments solutions. Its core offering revolves around payments cards, focusing on products that build loyalty for card issuers and merchants by capturing consumer data.
What it hasn’t done is venture into the BNPL space that is becoming popular with millennial consumers and digital natives. Confirming this, Alliance Data’s President and CEO, Ralph Andretta shares that the deal is “another way to capitalize on the rapidly growing e-commerce channel.”
Alliance’s second core centers around incentivizing sales and keeping cardholders engaged by cultivating “long-term brand loyalty,” which is where Bread’s capabilities will neatly integrate to elevate the Alliance’s offering. Under what will be called Alliance Data’s “Enhanced Digital Suite,” Bread’s point-of-sale technologies, pay-over-time-products, and flexible, easily-integrated payments solutions will come into play. It is these capabilities that provide Bread’s proven record for driving growth, which Alliance Data is confident will contribute meaningfully to the firm’s expansion, enabling it to offer an option for every customer need.
It appears that acquiring access to the coveted demographic of young consumers was a driving reason in the purchase. Speaking on this, Val Greer, Chief Commercial Officer of Alliance Data said, "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."