Synchrony, a consumer financial services company, has agreed to acquire Ally Financial’s point-of-sale financing business, including $2.2bn of loan receivables.
The portfolio comprises relationships with about 2,500 merchant locations and supports over 450,000 active borrowers in home improvement services and healthcare.
With the deal, Synchrony is expected to develop a differentiated solution in the industry, delivering revolving credit and instalment loans at the point of sale in the home improvement vertical.
The acquisition will boost Synchrony’s multi-product strategy by extending its revolving credit and promotional financing products to Ally Lending’s merchants.
It will also expand Synchrony’s reach in high-growth speciality areas like roofing, HVAC and windows.
Additionally, the Ally Lending health portfolio complements Synchrony’s existing Health and Wellness platform and expands Synchrony’s reach in cosmetics, audiology and dentistry.
Synchrony president and CEO Brian Doubles said: “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.
“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.”
Ally Financial CEO Jeff Brown said: “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.”
“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.”
The deal is anticipated to be completed in the first quarter of 2024, subject to the completion of customary closing conditions.
