BMO To Acquire Air Miles Rewards Program Following Bankruptcy Filing

BMO (TSX: BMO) has entered an arrangement to acquire the popular Air Miles Reward program from that of a subsidiary of Loyalty Ventures (NASDAQ: LYLT). The deal was announced concurrently this morning with the news that Loyalty Ventures and its subsidiaries have filed for chapter 11 bankruptcy protection in the US.

BMO has agreed to acquire Canada’s largest loyalty rewards program via a bid under the Companies Creditors Arrangement Act, which LoyaltyOne, the Canadian subsidiary of Loyalty Ventures, concurrently filed for protection under. For BMO, the proposed purchase falls under the sale and investment solicitation process, under which competing bids may be made for the program.

LoyaltyOne has entered into a debtor-in-possession facility with an affiliate of BMO, under which a non-revolving secured credit facility to the tune of $70 million will be made. That facility is expected to be used to fund financial obligations for both the Canadian subsidiary as well as its US-based parent during the bankruptcy process, subject to court approval.

Loyalty Ventures concurrently announced that it will be voluntarily delisting from the Nasdaq Global Select Market.

BMO is describing its acquisition of Air Miles as a “made-in-Canada opportunity to enable a reinvigoration for one of Canada’s largest loyalty programs.” The program, of which BMO was a founding member of, currently has an estimated 10 million members.

“BMO’s agreement to purchase the Air Miles business has no impact on AIR MILES collectors’ Reward Miles balances or on collectors’ ability to collect and redeem AIR MILES Reward Miles. AIR MILES continues to serve its customers — ensuring that they are rewarded richly and that they can use their Reward Miles in a way that meets their needs,” commented Shawn Stewart, President of the rewards program.

Financial terms of the proposed acquisition were not provided.

Information for this briefing was found via Sedar and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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