US-based Ally Financial has signed a definitive agreement to buy CardWorks in a deal valued at about $2.65bn.
The consideration for the deal includes approximately $1.35bn in cash and $1.30bn in Ally common stock, or 39.5 million shares.
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CardWorks is a non-prime credit card and consumer finance lender with $4.7bn in assets and $2.9bn in deposits.
As per the agreement, CardWork’s wholly owned bank subsidiary Merrick Bank will merge with Ally Bank.
The acquisition will diversify Ally Financial’s product offerings and scale-up its opportunity in credit card segment, including full-spectrum unsecured servicing capability, and merchant services.
Commenting on the acquisition, Ally Financial CEO Jeffrey J. Brown said: “CardWorks represents an industry-leading credit card platform in the US, and this acquisition serves as an important milestone in Ally’s evolution to be a full-service financial provider for our customers.
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By GlobalDataFollowing the completion of the deal, Ally will offer secured and unsecured banking products to over 11 million customers in 50 US states.
The acquisition is expected to complete by the third quarter of 2020.
Goldman Sachs & Co. LLC was the financial advisor, while Sullivan & Cromwell was the legal counsel to Ally in this transaction.
Wachtell, Lipton, Rosen & Katz served as legal counsel to CardWorks.
