Ally Agrees to Sale of Credit Card Business to CardWorks
Deal News | Jan 22, 2025 | Parthenon Capital LLC
Ally Financial Inc., a leading financial services company, has announced the sale of its credit card business to CardWorks, Inc. and its bank subsidiary, Merrick Bank. This transaction includes a $2.3 billion portfolio of credit card receivables with 1.3 million active cardholders. The sale aligns with Ally's strategic focus on simplifying its business structure to enhance its core operations and improve returns. CardWorks, which has served as the servicing partner for this credit card portfolio, sees the acquisition as a significant enhancement to its near-prime credit card business. Engagements with financial and legal advisors are underway as the companies work towards a smooth transition for customers and employees. The transaction is slated for completion in 2025, contingent upon customary closing conditions.
Sectors
- Financial Services
- Banking
- Mergers & Acquisitions
Geography
- United States – Both Ally Financial, headquartered in Charlotte, NC, and CardWorks, based in Woodbury, NY, are American companies.
Industry
- Financial Services – Both Ally Financial and CardWorks operate in this sector, providing a range of financial products including credit card services.
- Banking – Ally Financial is considered the nation's largest all-digital bank and CardWorks operates through its banking subsidiary, Merrick Bank.
- Mergers & Acquisitions – The article discusses the acquisition of Ally's credit card business by CardWorks, highlighting M&A activities.
Financials
- $2.3 billion – Value of the portfolio of credit card receivables involved in the transaction.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Ally Financial Inc. | Target company | Company | A financial services company known for its digital banking and auto financing solutions. |
| CardWorks, Inc. | Buyer | Company | A provider of customized credit and payment processing solutions. |
| Merrick Bank | Part of the Buyer | Company | A wholly-owned subsidiary of CardWorks that focuses on near-prime credit card services. |
| J.P. Morgan Securities LLC | Financial Advisor | Company | Acted as financial advisor to Ally Financial in this transaction. |
| Sullivan & Cromwell LLP | Legal Advisor | Company | Provided legal advisory services to Ally Financial. |
| Cravath, Swaine & Moore LLP | Legal Advisor | Company | Served as legal advisor to CardWorks. |