Ally Financial has entered into a definitive agreement to acquire CardWorks in a transaction valued at about $2.65 billion. Cardworks is a privately held company with $4.7 billion in assets and $2.9 billion in deposits. Under the terms of the agreement, Merrick Bank, a wholly owned subsidiary of CardWorks, will merge into Ally Bank.
The acquisition of CardWorks will further diversify Ally’s product offerings, adding an established credit card platform, full-spectrum servicing and recovery operation and a nationwide merchant acquiring business.
These additional capabilities immediately enhance Ally’s direct bank deposit and consumer product platform and complement the company’s market-leading auto finance, insurance, and commercial product lines. Upon completion of the transaction, Ally will provide more than 11 million customers in all 50 states with compelling secured and unsecured banking products.
CardWorks is a privately held company headquartered in Woodbury, N.Y., with facilities in Florida, Utah, and Pennsylvania.
CardWorks is a top-20 U.S. credit card issuer focused on the non-prime segment with a complementary full-spectrum unsecured servicing operation that includes third-party servicing and recovery capabilities. Additionally, CardWorks provides recreational and marine consumer finance products and is a top-15 merchant acquirer in the U.S..
“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 CEO Jeffrey J. Brown. “I have tremendous admiration for the three decades of leadership Don Berman has provided as founder and CEO and remain impressed with what the entire team has accomplished in building a resilient, growing business with a commitment to the customer. Beyond the compelling strategic rationale and financial enhancements this transaction brings, CardWorks is an ideal cultural fit for Ally. Both companies share a deep-rooted history of disciplined risk management and an obsession over the customer. I’m thrilled to welcome CardWorks to the Ally team and look forward to adding value for all of our stakeholders.”