Ally Financial sells POS financing business to Synchrony
Connecticut-headquartered financial services firm Synchrony is set to acquire Ally Lending, the point of sale (POS) financing business of Ally Financial, for an undisclosed sum.
Synchrony buys Ally Financial’s POS financing business
Synchrony says the acquisition, which will also include $2.2 billion in loan receivables, will enable the firm to create a “differentiated solution” through a duel offering of credit and instalment loans that will now also be available to Ally Lending’s merchant portfolio.
As part of what it defines as a multi-product strategy, the firm is planning to include instalment loans as an option at the POS within its home improvement vertical, targeting “high-growth speciality areas” including roofing, air conditioning and windows.
It is also planning to integrate Ally Lending’s health portfolio into its existing health and wellness platform with the intention of providing more financing to the cosmetic, audiology and dentistry sectors.
Brian Doubles, CEO and president of Synchrony, says the acquisition will “unlock value and operational efficiency” and represents a “significant and exciting growth opportunity” for the firm.
“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.”
For Ally Financial, CEO Jeff Brown says the decision to sell its POS financing business is part of “a broader initiative to invest resources in growing scale businesses and strengthening relationships with dealer customers and consumers”, and allows the company to continue allocating capital to “optimise risk-adjusted returns as we manage through a dynamic operating environment”.
