Shares of Ally common stock granted to Mr. Berman, Chairman, Chief Executive Officer and Founder of CardWorks, owns 70% of CardWorks and will receive a combination of cash and Ally common stock as his consideration. The merger consideration remains subject to closing equity and other adjustments and fill-or-kill rights.ĭon M. I’m thrilled to welcome CardWorks to the Ally team and look forward to adding value for all of our stakeholders.”Ĭonsideration 3 for the transaction will include approximately $1.35 billion of cash and $1.30 billion in Ally common stock, or 39.5 million shares 4. Both companies share a deep-rooted history of disciplined risk management and an obsession over the customer. Beyond the compelling strategic rationale and financial enhancements this transaction brings, CardWorks is an ideal cultural fit for Ally. “I have tremendous admiration for the three decades of leadership Don Berman has provided as founder and CEO and remain impressed with what the entire team has accomplished in building a resilient, growing business with a commitment to the customer. “CardWorks represents an industry-leading credit card platform in the U.S., and this acquisition serves as an important milestone in Ally’s evolution to be a full-service financial provider for our customers,” said Ally Chief Executive Officer Jeffrey J. Additionally, CardWorks provides recreational and marine consumer finance products and is a top-15 2 merchant acquirer in the United States. credit card issuer focused on the non-prime segment with a complementary full-spectrum unsecured servicing operation that includes third-party servicing and recovery capabilities. Upon completion of the transaction, Ally will provide over 11 million customers in all 50 states with compelling secured and unsecured banking products.ĬardWorks is a privately held company headquartered in Woodbury, NY with facilities in Florida, Utah and Pennsylvania. These additional capabilities immediately enhance Ally’s award-winning direct bank deposit and consumer product platform and complement the company’s market-leading auto finance, insurance, and commercial product lines. The acquisition of CardWorks will further diversify Ally’s product offerings, adding an established credit card platform, full-spectrum servicing and recovery operation and a nationwide merchant acquiring business. Under the terms of the agreement, Merrick Bank, a wholly owned subsidiary of CardWorks, Inc., will merge into Ally Bank. Cardworks is a privately held company with $4.7 billion in assets and $2.9 billion in deposits 1. The deal is expected to close in the third quarter of 2020.Īlly shares were down more than 11% in midday trading Wednesday following the news.Ally Financial has entered into a definitive agreement to acquire CardWorks in a transaction valued at approximately $2.65 billion. He said he would have preferred to see the company build its card business organically or deploy capital elsewhere.ĬardWorks had previously received investments from Pacific Investment Management, Parthenon Capital Partners and Reverence Capital Partners. In a note to clients, Piper Sandler analyst Kevin Barker said Ally was paying a “steep price” to diversify its product offering. “Beyond the compelling strategic rationale and financial enhancements this transaction brings, CardWorks is an ideal cultural fit for Ally.” “This acquisition serves as an important milestone in Ally’s evolution to be a full-service financial provider for our customers,” Ally chief executive Jeffrey Brown said in statement. Its common equity tier 1 capital ratio would remain largely unchanged, it said. “The combined company will be well positioned to meet the financial needs of our ever-growing customer base and deliver sustainable growth and performance,” said Berman.Īlly said it expected immediate enhancements of its revenues. He will continue to act as CEO of CardWorks. CardWorks chief executive Don Berman, who owns 70% of the company, will join Ally’s board of directors and become a member of its executive management team. Under the terms of the deal, Merrick Bank, a subsidiary of CardWorks, will merge into Ally Bank.
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