STAMFORD, Conn. - Synchrony (NYSE: SYF) has reached a definitive agreement to acquire the point of sale financing operations from Ally Financial Inc. (NYSE: NYSE:ALLY), including a loan portfolio valued at $2.2B. The portfolio acquisition, announced Today, includes nearly 2,500 merchant locations and supports over 450,000 active borrowers, specifically in the home improvement and healthcare sectors.
This strategic move is set to enhance Synchrony's market reach and scale in these industries, providing a multi-product offering that combines revolving credit and installment loans. Synchrony's President and CEO, Brian Doubles, stated that the acquisition aligns with the company's growth strategy and will generate value and operational efficiency by integrating products and teams.
On the other side of the transaction, Ally Financial's CEO, Jeff Brown, explained that the sale is part of a broader initiative to allocate resources towards scaling businesses and reinforcing relationships with dealer customers and consumers.
Financially, Ally anticipates the sale will modestly increase its tangible book value and earnings per share for 2024 and improve the company's CET1 ratio by approximately 15 basis points upon closure. Meanwhile, Synchrony expects the acquisition to be accretive to its full-year 2024 earnings per share, not accounting for the initial credit loss reserve build at the time of acquisition.
The transaction aims to provide a seamless transition for merchants, customers, and employees, with a projected closure in the first quarter of 2024, pending customary closing conditions. Further details on the acquisition will be disclosed during Synchrony's fourth-quarter 2023 earnings conference call on January 23, 2024.
Both Synchrony and Ally are well-established in the financial services sector, with Synchrony offering a suite of financing solutions and digital capabilities across various industries, and Ally Financial operating the nation's largest all-digital bank and a leading auto financing business.
The information presented in this article is based on a press release statement.
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