Alliance Data Systems Corporation (NYSE:ADS) announced the spin-off of 81% LoyaltyOne segment on May 11, 2021. Under the terms, shareholders will receive 1 share for 2.5 shares. Immediately following the transaction, Alliance Data stockholders will own shares of both companies, with Alliance Data retaining a minority stake in LoyaltyOne segment. Upon completion of the spinoff, Charles Horn, Executive Vice President and Senior Advisor of Alliance Data, will be named Chief Executive Officer of Spinco.

Blair Cameron and Claudia Mennen will continue to lead AIR MILES and BrandLoyalty, respectively. The remainder of the Spinco leadership team and board of directors will be announced over the next several months. The transaction will be in the form of a distribution to Alliance Data stockholders of approximately 81% of the shares of Spinco, a new entity holding the LoyaltyOne segment.

New entity will be named as Loyalty Ventures Inc., which will begin trading as LYLT on the Nasdaq exchange. LoyaltyOne reported $765 million of revenue and $186 million as adjusted EBITDA in December 31, 2020. The proposed spinoff is subject to customary conditions, including final approval by Alliance Data's Board of Directors, receipt of a favorable tax ruling from the Internal Revenue Service, the filing and effectiveness of a Form 10 registration statement with the U.S. Securities and Exchange Commission, approval for listing of Spinco's common stock on a national securities exchange and completion of any necessary financings. ADS expects to receive a $750 million cash distribution at the Spin-off date, which will be used for deleveraging.

As of Board of Directors of Alliance Data approved the deal. Transaction record date is set to October 27, 2021. Alliance Data expects the spinoff to be completed in Q4 2021.

The distribution of Loyalty Ventures' shares is expected to be completed after the market closes on November 5, 2021. As of October 22, 2021, Loyalty Ventures, Inc is expected to commence trading on October 26, 2021 under the ticker LYLTV and the first day of “regular way” trading is anticipated to be November 8, 2021. The symbol will change to LYLT on that date.

Morgan Stanley is serving as financial advisor and Louis L. Goldberg, John. B. Meade, William A. Curran, Adam Kaminsky and Frank J. Azzopardi of Davis Polk is serving as legal advisor for Alliance Data Systems.