November 19, 2018

Aimia, Air Canada agree on purchase of the Aeroplan loyalty business

MONTREAL--Data-driven marketing and loyalty analytics company Aimia Inc. today announced a definitive share purchase agreement with Air Canada for the purchase by Air Canada of all of the issued and outstanding share capital of Aimia Canada Inc., the owner and operator of the Aeroplan loyalty program, for an all-cash purchase price of $450 million on a cash-free, debt-free basis.

By acquiring Aimia Canada, Air Canada will, on the closing of the transaction, assume the assets and employees of the business as well as the liabilities and obligations relating to the Aeroplan loyalty program, including $50 million of negative working capital and $1.9 billion of future redemption liabilities related to outstanding Aeroplan miles (both of which are subject to dollar-for-dollar adjustments based upon the actual amounts at the closing of the transaction) and an estimated $45 million of retirement and other benefit obligations.

The Agreement was unanimously approved by Aimia's Board of Directors upon recommendation of a special committee of independent directors. RBC Capital Markets acted as financial advisor and has provided a fairness opinion to Aimia's Board in connection with the transaction.

The transaction is expected to close as soon as practicable after the approval of the transaction by Aimia's common and preferred shareholders, as well as satisfaction or waiver of other customary closing conditions, including regulatory approvals.

Aimia will hold a special meeting of common and preferred shareholders on January 8, 2019, in Montreal, Quebec, and it has fixed December 6, 2018, as the record date for the special meeting. Aimia shareholders will receive information about the meeting and how to vote in the coming days.

Concurrently with and assuming closing of the transaction, Aimia will repay and terminate its existing credit facility and will defease and redeem its outstanding Senior Secured Notes.

"This transaction delivers significant value to Aimia. Once complete, Aimia will be well-positioned to renew its focus on maximizing the returns from its substantial assets and remaining business lines," said Robert E. Brown, Chairman of the Board. "The proceeds realized from this transaction will put Aimia in the enviable position of having significant cash and investments on hand and no financial indebtedness, providing the Board a solid foundation on which to make decisions around the Company's future strategic and capital allocation priorities."

The Agreement includes customary representations and warranties, indemnity provisions and other closing conditions, including the setting aside of $100 million in a restricted, interest-bearing account on Aimia's balance sheet to reflect uncertainty around potential future indemnity obligations related to an ongoing income tax audit. The outcome of the audit is not determinable at this time. Were it to result in a re-assessment, Aimia Canada would vigorously contest the merits of any such re-assessment and believes that it is more likely than not that it would prevail in any proceedings.

As previously announced, Aimia's Board of Directors is actively engaged in reviewing and evaluating the company's future strategic direction, including as a leading player in loyalty management and it has formed a committee of independent directors for the purpose of receiving and considering Management recommendations.

Beyond the Aeroplan loyalty program, Aimia works with dozens of Canadian and international blue-chip clients. Across its leading roster of clients, Aimia provides tailored loyalty strategy, program development, implementation and management services that empower brands and deliver unique value to millions of loyalty customers around the world. It has a 49% stake in in PLM Premier, S.A.P.I. de C.V., the owner and operator of Aeromexico's Club Premier frequent flyer program, a 15% stake in Nasdaq-listed purchase intelligence leader Cardlytics, as well as minority interests in Think Big, which owns and operates the loyalty program for AirAsia, and Fractal Analytics, a strategic analytics partner to Fortune 500 companies globally.

Norton Rose Fulbright Canada LLP is acting as legal advisors to Aimia and its Board of Directors. Aimia has also retained Kingsdale Advisors as its strategic shareholder advisor and proxy solicitation agent in connection with the special meeting of shareholders and the shareholder vote.

Aimia Inc.'s data-driven marketing and loyalty analytics provides clients with the customer insights they need to make smarter business decisions and build relevant, rewarding and long-term one-to-one relationships, evolving the value exchange to the mutual benefit of both our clients and consumers.

Aimia partners with groups of companies and individual companies to help generate, collect and analyze customer data and build actionable insights.

The businesses include Aeroplan in Canada and Air Miles Middle East. The provision of loyalty strategy, program development, implementation and management services for other clients are underpinned by leading products and technology platforms such as the Aimia Loyalty Platform – Enterprise and Aimia Loyalty Platform – SaaS, and through the analytics and insights business, including Intelligent Shopper Solutions. In other markets, they own stakes in loyalty programs, such as Club Premier in Mexico and Think Big, a partnership with Air Asia and Tune Group. The firm's clients are diverse, and they have industry-leading expertise in the fast-moving consumer goods, retail, financial services, and travel and airline industries globally to deliver against their unique needs.



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