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MONTREAL - Groupe Aeroplan Inc. (TSX:AER) has gained a U.S. foothold with the purchase of customer loyalty company Carlson Marketing as the company pursues more international growth.
Aeroplan, a loyalty rewards program spun off from Air Canada (TSX:AC.A) said Tuesday it had paid $188 million for Carlson Marketing, a global customer-loyalty company.
CEO Rupert Duchesne said the acquisition gives Aeroplan a substantial source of revenue and diverse clients around the world.
"It substantially adds to our strength as we try to grow elsewhere in the world," Duchesne said in an interview from Minneapolis where Carlson Marketing is headquartered.
Aeroplan had been looking for a presence in the United States since 2005, Duchesne said, and had previously considered small scale acquisitions and investments in frequent flyer programs in the United States.
"The only logical way in, rather than trying to build something up from scratch itself was to buy the market leader."
Aeroplan said Carlson Marketing will be run as a separate division from Aeroplan's other businesses.
Carlson, which doesn't publicly name its clients, runs U.S.-based loyalty programs in areas such as financial services, automotive and transportation, among others, he said.
The company has a presence in 14 countries, including Spain, the United Kingdom, Australia, Brazil, Hong Kong, Singapore, Dubai and Kuwait. Duchesne said it will soon be expanding into India, another large and fast-growing consumer market.
However, the United States is considered an important key to global expansion due to the size of its consumer market.
"It is our belief with the acquisition of Carlson Marketing we will be well positioned to further penetrate the U.S. across all of our lines of business," he told a conference call with analysts.
Analyst Kenric Tyghe said Aeroplan needs a U.S. presence because its biggest competitor is U.S.-based Alliance Data Systems Corp., which owns the Air Miles reward program in Canada.
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