Synchrony has agreed to buy Ally Financial’s point-of-sale financing business.
The companies said in a press release that the sale includes $2.2 billion of loan receivables. The portfolio includes relationships with roughly 2,500 merchant locations and supports more than 450,000 active borrowers.
The deal is expected to close in the first quarter. The financial terms were not disclosed.
“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,” Synchrony President and CEO Brian Doubles said in the release.
“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,” he added.
Ally said it expects the sale to boost its CET1 ratio by about 15 basis points upon closing and be modestly accretive to its tangible book value and 2024 earnings per share.
Synchrony said it expects the deal to be accretive to its full-year 2024 earnings per share, excluding an initial reserve build for credit losses. It should take between three and four years for Synchrony to earn back any dilution to its tangible book value.