Synchrony to acquire Ally Financial’s point of sale financing business

Synchrony (SYF) and Ally Financial (ALLY) announced that they have entered into a definitive agreement for Synchrony to acquire Ally’s point of sale financing business including $2.2B of loan receivables. The portfolio includes relationships with nearly 2,500 merchant locations and supports more than 450,000 active borrowers in home improvement services and healthcare. Ally expects the sale to increase the company’s CET1 ratio by approximately 15 basis points upon closing and be modestly accretive to tangible book value and earnings per share in 2024. Synchrony expects the acquisition to be accretive to full year 2024 earnings per share, excluding the impact of the initial reserve build for credit losses at acquisition. The acquisition is expected to realize an attractive internal rate of return for Synchrony with an approximate three-and-a-half-year tangible book value earnback. Synchrony will provide more information regarding the acquisition during its fourth quarter 2023 earnings conference call on Tuesday, January 23, 2024. Synchrony and Ally will work together to ensure a smooth transition for merchants, customers and employees. The transaction is expected to close in the first quarter of 2024, subject to the completion of customary closing conditions.