STAMFORD, Conn. - Synchrony (NYSE: SYF) has completed the purchase of Ally Lending, the point-of-sale financing division of Ally Financial (NYSE: NYSE:ALLY), which includes a loan portfolio of $2.2 billion. The acquisition, which was finalized today, broadens Synchrony's reach in the home improvement and health and wellness sectors, particularly in high-demand areas such as roofing, HVAC, and windows, along with cosmetic, audiology, and dentistry services.
Nearly 2,500 merchant locations and over 450,000 active borrowers in home improvement and healthcare services are encompassed in Ally's loan portfolio. The integration will enhance Synchrony's multi-product strategy by extending its core revolving product to Ally's partners and accelerating the availability of installment products to Synchrony's merchants and contractors.
This move positions Synchrony to offer a unique industry solution by providing both revolving credit and installment loans at the point-of-sale within the home improvement sector.
Curtis Howse, CEO of Home & Auto at Synchrony, expressed enthusiasm about the acquisition, stating, "The combination of their industry knowledge, flexible financing solutions, and customer-focused mindset paired with Synchrony's multi-product strategy will provide more choice to our consumers and help our merchants grow."
Synchrony anticipates that this acquisition will contribute positively to its full-year 2024 earnings per share, not accounting for the initial credit loss reserve at acquisition. The company also expects the acquisition to yield an attractive internal rate of return with an estimated three-and-a-half-year tangible book value earnback.
This expansion is seen as a significant growth opportunity for Synchrony, which aims to use its expertise to scale the business. The acquisition is based on a press release statement and is expected to be accretive to Synchrony's earnings while expanding its product offerings and market presence.
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