Winnipeg 
Bank of Montreal has signed a purchase agreement to acquire the AIR MILES Reward Program business, subject to court approval and regulatory clearance.
Credit: AIR MILES
AIR MILES is one of Canada’s largest loyalty programs, with more than 11 million members who earn points by shopping at more than 300 retailers and service providers across the country.
The proposed acquisition is seen as a made-in-Canada opportunity to reinvigorate the program for the benefit of Canadian consumers, merchants and partners. The acquisition would accelerate the future growth of AIR MILES, which had been struggling in recent years.
“As a leading partner, we have always believed in the value of the AIR MILES program for Canadians and are confident about the continued opportunities to build even greater customer loyalty,” said Ernie Johannson, Group Head, North American Personal & Business Banking, BMO in a news release.
“If our acquisition of the AIR MILES business is successful, we will bring the ownership of AIR MILES home to Canada and strengthen its offering for Canadian consumers and businesses together with leading Canadian, global and online program partners and merchants.”
The program’s parent company, Loyalty Ventures Inc., filed for relief under Chapter 11 of the United States Code in the Southern District of Texas Bankruptcy Court.
The proceedings under the Companies’ Creditors Arrangement Act (Canada) involve a sale and investment solicitation process (SISP) to solicit any other interest in the AIR MILES business.
The SISP procedures provide that the consummation of the sale transaction with BMO is conditioned on LoyaltyOne not receiving a more favourable offer from another party in accordance with the SISP.
If the acquisition goes through, LoyaltyOne, as borrower, will enter into a debtor-in-possession (DIP) facility with an affiliate of BMO, as lender, which will make available a non-revolving secured credit facility of $70 million.
The proposed acquisition will be subject to Court approval, and a proposed acquisition by any other bidder will also be subject to Court approval.
