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Synchrony and Ally Financial Reach Agreement on Sale of Ally’s Point-of-Sale Financing Business
Acquisition increases Synchrony’s reach and scale in home improvement and health and wellness financing;
The sale allows Ally to invest its resources in growing business and strengthen relationships with reseller customers and consumers
STAMFORD, Connecticut and CHARLOTTE, North Carolina, Jan. 19, 2024 /PRNewswire/ — Synchrony (NYSE: SYF) and Ally Financial Inc.ALLY), announced today that they have entered into a definitive agreement for Synchrony to acquire Ally’s point-of-sale financing business, including $2.2 billion in loan receivables.* The portfolio includes relationships with nearly 2,500 commercial locations and supports more of 450,000 active home improvement borrowers. health services and care.
Synchrony and Ally Financial reach agreement on the sale of Ally’s point-of-sale financing business.
Through this acquisition, Synchrony will create a differentiated solution in the sector – simultaneously offering revolving credit and installment loans at the point of sale in the home improvement vertical. This expands Synchrony multiproduct strategy extending its revolving credit and promotional financing products to Ally Lending merchants. The agreement also expands Synchrony’s reach into specialized high-growth areas such as roofs, HVAC and windows. Additionally, Ally Lending’s healthcare portfolio complements Synchrony’s existing health and wellness platform and expands Synchrony’s reach into cosmetics, audiology and dentistry.
“This agreement represents a significant and exciting growth opportunity for Synchrony – it is a strong strategic fit that will unlock value and operational efficiencies by integrating products and teams across our expanding home improvement, health and wellness platforms,” said Brian Doubles, president and CEO of Synchrony. . “This aggregate acquisition enhances Synchrony’s position by offering our multi-product portfolio to nearly 2,500 Ally Lending business locations, and allows us to achieve attractive economies of scale while further diversifying our business base.”
“Today’s agreement to sell Ally Lending is part of a broader initiative to invest resources in growing scale businesses and strengthen relationships with dealer and consumer clients,” said Ally Financial CEO Jeff (JB) Brown. “This transaction allows us to continue to be disciplined in allocating capital to optimize risk-adjusted returns as we manage through a dynamic operating environment.”
Ally expects the sale to increase the company’s CET1 ratio by approximately 15 basis points after closing and modestly increase tangible book value and earnings per share in 2024.
Synchrony expects the acquisition to be accretive to full-year 2024 earnings per share, excluding the impact of the initial credit loss reserve buildup on the acquisition. The acquisition is expected to provide an attractive internal rate of return for Synchrony, with a tangible book value return of approximately three and a half years. Synchrony will provide more information on the acquisition during its fourth quarter of 2023 earnings conference call on Tuesday, January 23, 2024.
Synchrony and Ally will work together to ensure a smooth transition for merchants, customers and employees. The transaction is expected to close in the first quarter of 2024, subject to satisfaction of customary closing conditions.
*Value of credits receivable on December 31, 2023.
About Synchrony
Synchrony (NYSE: SYF) is a leading consumer financial services company offering one of the industry’s most comprehensive suites of digitally enabled products. Our experience, knowledge and scale span a broad spectrum of industries, including digital, health and wellness, retail, telecommunications, home, automotive, outdoor, pets and more. We have an established and diverse group of national and regional retailers, local merchants, manufacturers, purchasing groups, industry associations and healthcare providers, who we refer to as our “partners”. We connect our partners and consumers through our dynamic financial ecosystem and provide them with a diverse set of financing solutions and innovative digital capabilities to meet their specific needs and deliver seamless omnichannel experiences. We deliver the right financing products to the right customers in the channel of their choice. For more information visitwww.sincronia.com.
About Ally Financial
(NYSE: ALLY) is a financial services company with the nation’s largest fully digital bank and an industry-leading auto financing company, driven by the mission to “do the right thing” and be a tireless ally to customers and communities. The company serves more than 11 million customers through a full range of online banking services (including deposits, mortgages, point-of-sale personal loans, and credit card products) and securities brokerage and security advisory services. investments. The company also includes a robust corporate finance business that provides capital to equity sponsors and middle market companies, as well as auto financing and insurance offerings. For more information please visit www.ally.com And follow @allyfinancial.
For more information and disclosures about Ally, visit https://www.ally.com/#disclosures.
For more images and news about Ally, visit http://media.ally.com.
Forward-Looking Statements
This press release and any related communications contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts – such as statements about o outlook for financial and operational metrics and performance and future capital allocation and actions. Forward-looking statements often use words such as “believe”, “expect”, “anticipate”, “intend”, “pursue”, “seek”, “continue”, “estimate”, “project”, “outlook”, “forecast”, “potential”, “target”, “objective”, “trend”, “plan”, “goal”, “initiative”, “priorities” or other words of comparable meaning or future tense verbs or conditionals such as “may”, “will”, “should”, “would” or “could”.
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Sync Media Contact:
Lisa Lanspery
[email protected]
Synchronized Investor Contact:
Kathryn Miller
[email protected]
Allied communications (media):
Pedro Gilchrist
[email protected]
Allied Investor Relations:
Sean Leary
[email protected]
SOURCE Financial Synchrony