ADS - Alliance Data Systems

[LowIQinvestor]

Oh and L Brands ( ADS' largest customer - 10%) is starting to turn the corner on more positive SSS.

Doesn't hurt

http://investors.lb.com/phoenix.zhtml?c=94854&p=irol-newsArticle&ID=2376182

[vince]

The one from December 27th 2017?

[KCLarkin]

Sept 28, 2018

[vince]

Thanks again

[vince]

 Guys I am really trying to put a value on the 2 businesses that they might sell but havent had the time to research comparables and I dont follow those types of businesses.  Anyone here that can shed some light on what these things are worth?

[flesh]

SoTp, Assuming epsilon sells (not saying it will) at 9x ebitda ttm and Loyaltyone/Brand loyalty at 6x ebitda ttm adding low double digit growth for card services plus card services NTM fcf, Card services today is selling at 3x ev/ebitda and 5.5 NTM fcf.

[vince]

SoTp, Assuming epsilon sells (not saying it will) at 9x ebitda ttm and Loyaltyone/Brand loyalty at 6x ebitda ttm adding low double digit growth for card services plus card services NTM fcf, Card services today is selling at 3x ev/ebitda and 5.5 NTM fcf.

What are you doing with the debt? Keeping it with ADS stub? Is that appropriate?

[flesh]

SoTp, Assuming epsilon sells (not saying it will) at 9x ebitda ttm and Loyaltyone/Brand loyalty at 6x ebitda ttm adding low double digit growth for card services plus card services NTM fcf, Card services today is selling at 3x ev/ebitda and 5.5 NTM fcf.

What are you doing with the debt? Keeping it with ADS stub? Is that appropriate?

I am leaving all debt with Card Services stub. Not sure what's appropriate but leaving it with the stub is more not less conservative for a napkin SOTP.

[vince]

SoTp, Assuming epsilon sells (not saying it will) at 9x ebitda ttm and Loyaltyone/Brand loyalty at 6x ebitda ttm adding low double digit growth for card services plus card services NTM fcf, Card services today is selling at 3x ev/ebitda and 5.5 NTM fcf.

What are you doing with the debt? Keeping it with ADS stub? Is that appropriate?

I am leaving all debt with Card Services stub. Not sure what's appropriate but leaving it with the stub is more not less conservative for a napkin SOTP.

Dont want to bust your chops but how is the valuation more conservative by keeping debt at ADS?

[vince]

I hold a large position because I like stuff that is trading at 10 times fcf or less and growing, and where the business is sticky, defensible.  I want to make it even larger but am hesitant because I just have no idea what the stub is going to look like.  This mgmt has driven me crazy with their info sharing