Cardholder Management Services, Inc. (“CardWorks”), a leading non-prime credit card and consumer finance lender with a full-spectrum unsecured servicing platform and robust merchant services capabilities, announced that it has signed a definitive agreement to be acquired by Ally Financial Inc. in a transaction valued in excess of $2.65 billion, subject to final closing equity and other adjustments.
The closing will bring together two customer-obsessed companies that are focused on “Doing it Right”, with a shared common vision and aligned cultural values. This combination will provide customers with a comprehensive suite of compelling secured and unsecured banking products.
CardWorks is a privately held company headquartered in Woodbury, NY with facilities in Florida, Pennsylvania and Utah. As a leading non-prime credit card and consumer finance provider with servicing capabilities across the credit spectrum, a top-20 U.S. credit card issuer, and a top-15 U.S. merchant acquirer, the roadmap includes expanding Ally’s product offerings in the non-prime segment, as well as enhancing their direct bank deposit and consumer product platform, and third-party servicing and recovery capabilities.
Under the terms of the agreement, Merrick Bank, a wholly-owned subsidiary of CardWorks, Inc., will merge into Ally Bank.
“The combination of CardWorks and Ally presents a tremendous opportunity for innovation, while we maintain a strong focus on our mission – which is to delight our clients and customers” said CardWorks Founder, Chairman and Chief Executive Officer Don Berman. “Ally is complementary to all of our existing consumer finance business lines, including our credit card and recreational lending businesses, as well as our merchant acquiring, third-party loan servicing, and recovery businesses. I am extremely enthusiastic about this acquisition and what it represents for our customers, clients, employees, and the communities in which we operate.”
Don Berman will continue to oversee the CardWorks business lines as part of Ally and will join Ally’s Board of Directors and executive management team following closing.
Ally Financial Inc. is a leading digital financial services company focused on “Doing it Right” for its consumer, commercial, and corporate customers. The company operates one of the largest full-service automotive-finance operations in the country, offering a wide range of financial services and insurance products to automotive dealerships and consumers. In addition, Ally’s award-winning online bank (Ally Bank, Member FDIC and Equal Housing Lender) offers mortgage-lending services and a variety of deposit and other banking products. The company also offers securities-brokerage and investment-advisory services through Ally Invest, as well as a robust corporate finance business that offers capital for equity sponsors and middle-market companies.
“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. Brown. “Culturally, Ally and CardWorks are ideal partners as both companies share a deep-rooted history of disciplined risk management and an obsession over the customer.”
The acquisition, which is subject to customary regulatory approvals and closing conditions, is expected to close in the third quarter of 2020.