NEW YORK (TheStreet) -- Shares of Conversant Inc. (CNVR) are jumping 33.47% to $35.65 in after-hours trading on Thursday, following Alliance Data Systems Corp.'s (ADS) announcement that it has entered into a definitive agreement to purchase the company for approximately $2.3 billion.
Alliance Data Systems is a global provider of data-driven marketing and loyalty solution. Conversant is a digital marketing company.
Alliance Data will acquire all outstanding shares of the company for $35 per share.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
"The acquisition of Conversant establishes a truly unique end-to-end marketing services company that will empower clients to more effectively market to their customers across all channels," Alliance Data said.
Alliance Data said it's expecting substantial accretion from the transaction of 50 cents per share the first year, and 75 cents per share the second year.
Shares of Alliance Data are higher by 2.66% to $259.59 in after-hours trading today.
Separately, TheStreet Ratings team rates CONVERSANT INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate CONVERSANT INC (CNVR) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 212.50% and other important driving factors, this stock has surged by 29.31% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CNVR should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- CONVERSANT INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CONVERSANT INC increased its bottom line by earning $1.25 versus $1.00 in the prior year. This year, the market expects an improvement in earnings ($1.76 versus $1.25).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 48.8% when compared to the same quarter one year prior, rising from $11.88 million to $17.67 million.
- CNVR's revenue growth trails the industry average of 19.9%. Since the same quarter one year prior, revenues slightly increased by 7.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Although CNVR's debt-to-equity ratio of 0.13 is very low, it is currently higher than that of the industry average. To add to this, CNVR has a quick ratio of 1.95, which demonstrates the ability of the company to cover short-term liquidity needs.
- You can view the full analysis from the report here: CNVR Ratings Report
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he and Stephanie Link think could be potentially HUGE winners. Click here to see the holdings for FREE.