Acquisition Enhances Synchrony's Reach and
Scale in Home Improvement and Health and Wellness
Financing;
Sale Enables Ally To Invest Its Resources in
Growing Scale Businesses and Strengthening Relationships with
Dealer Customers and Consumers
STAMFORD, Conn. and CHARLOTTE, N.C., Jan. 19,
2024 /PRNewswire/ -- Synchrony (NYSE: SYF) and Ally
Financial Inc. (NYSE: ALLY), today announced that they have entered
into a definitive agreement for Synchrony to acquire Ally's point
of sale financing business including $2.2
billion of loan receivables.* The portfolio includes
relationships with nearly 2,500 merchant locations and supports
more than 450,000 active borrowers in home improvement services and
healthcare.
Through this acquisition, Synchrony will create a differentiated
solution in the industry -- simultaneously offering both revolving
credit and installment loans at the point-of-sale in the home
improvement vertical. This expands Synchrony's multi-product
strategy by extending its revolving credit and promotional
financing products to Ally Lending's merchants. The deal also
expands Synchrony's reach in high-growth specialty areas such as
roofing, HVAC and windows. Further, the Ally Lending health
portfolio complements Synchrony's existing Health and Wellness
platform and extends Synchrony's reach in cosmetic, audiology and
dentistry.
"This deal represents a significant and exciting growth
opportunity for Synchrony – it's a strong strategic fit that will
unlock value and operational efficiency by integrating products and
teams in our expanding platforms of home improvement and health and
wellness," said Synchrony President and CEO Brian Doubles. "This accretive acquisition
enhances Synchrony's position by offering our multi-product
portfolio to nearly 2,500 Ally Lending merchant locations, and
enables us to achieve attractive economies of scale while further
diversifying our merchant base."
"Today's agreement to sell Ally Lending is part of a broader
initiative to invest resources in growing scale businesses and
strengthening relationships with dealer customers and consumers,"
said Ally Financial Chief Executive Officer 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 upon closing and be modestly
accretive to 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
reserve build for credit losses at acquisition. The acquisition is
expected to realize an attractive internal rate of return for
Synchrony with an approximate three-and-a-half-year tangible book
value earnback. Synchrony will provide more information regarding
the acquisition during its fourth quarter 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 the
completion of customary closing conditions.
*Amount of loan receivables as of December 31, 2023.
About Synchrony
Synchrony (NYSE: SYF) is a premier consumer financial services
company delivering one of the industry's most complete
digitally-enabled product suites. Our experience, expertise and
scale encompass a broad spectrum of industries including digital,
health and wellness, retail, telecommunications, home, auto,
outdoor, pet and more. We have an established and diverse group of
national and regional retailers, local merchants, manufacturers,
buying groups, industry associations and healthcare service
providers, which 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 address their specific needs and
deliver seamless, omnichannel experiences. We offer the right
financing products to the right customers in their channel of
choice. For more information, visit www.synchrony.com.
About Ally Financial
Ally Financial Inc. (NYSE: ALLY) is a financial services company
with the nation's largest all-digital bank and an industry-leading
auto financing business, driven by a mission to "Do It Right" and
be a relentless ally for customers and communities. The company
serves more than 11 million customers through a full range of
online banking services (including deposits, mortgage,
point-of-sale personal lending, and credit card products) and
securities brokerage and investment advisory services. The company
also includes a robust corporate finance business that offers
capital for 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 further images and news on Ally, please
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 the outlook
for financial and operating metrics and performance and future
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"goal," "initiative," "priorities," or other words of comparable
meaning or future-tense or conditional verbs such as "may," "will,"
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Forward-looking statements convey our expectations,
intentions, or forecasts about future events, circumstances, or
results. All forward-looking statements, by their nature, are
subject to assumptions, risks, and uncertainties, which may change
over time and many of which are beyond our control. You should not
rely on any forward-looking statement as a prediction or guarantee
about the future.
Actual future objectives, strategies, plans, prospects,
performance, conditions, or results may differ materially from
those set forth in any forward-looking statement. Some of the
factors that may cause actual results or other future events or
circumstances to differ from those in forward looking statements
are described in our Annual Report on Form 10-K for the year ended
December 31, 2022, our subsequent
Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, or
other applicable documents that are filed or furnished with the
U.S. Securities and Exchange Commission (collectively, our "SEC
filings"). Any forward-looking statement made by us or on our
behalf speaks only as of the date that it was made. We do not
undertake to update any forward-looking statement to reflect the
impact of events, circumstances, or results that arise after the
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Synchrony Media Contact:
Lisa Lanspery
lisa.lanspery@synchrony.com
Synchrony Investor Contact:
Kathryn Miller
kathryn.miller@synchrony.com
Ally Communications (Media):
Peter Gilchrist
peter.gilchrist@ally.com
Ally Investor Relations:
Sean Leary
sean.leary@ally.com
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SOURCE Synchrony Financial