On Wednesday February 20, the growing financial services company Ally Financial (NYSE: ALLY) announced its plans to acquire CardWorks, the credit card and consumer financing lender. The deal will cost Ally $2.65 billion. More importantly, it will bring together two companies who claim to share a common goal of putting customers first.
About the Deal
CardWorks is a lender focused on the non-prime market. Its services include collections, merchant acquiring, and processing for consumer credit cards. This includes those offered by Merrick Bank, founded by CardWorks in 1997. Since 1987, CardWorks has sought to provide delightful service to its customers. CEO Don Berman believes the merger will only bolster this. When asked about the deal, he said “At CardWorks, we’ve successfully built a people-centric, compliance-focused organization enabled by technology with a mission to delight our clients and customers, and Ally represents an ideal partner.” The company will bring with it about $4.7 billion in assets, as well as $2.9 billion in deposits. Berman will reportedly receive $1.35 billion in cash, with $1.30 billion in Ally stock. In addition, Ally has offered him a spot on the Board of Directors. He plans to continue his oversight of the CardWorks aspect of the business. The deal won’t officially close until the third quarter of 2020.
What Does the Ally Financial Acquisition Mean for Consumers?
Ally Financial is a holding company that currently focuses on auto financing and insurance, mortgages, and banking through its online platform, Ally Bank. The company seeks to complement its current services with the help of this acquisition, expanding into the non-prime market. This will enable the company to take another step closer to its goal of becoming a full-service financial firm. The most notable change for consumers will likely be that CardWorks’ Merrick Bank will merge into Ally Bank. Ally Bank’s won the title of “Best Online Bank” several times over since its founding. Money Magazine most recently gave Ally this accolade in 2019. Further information about what will happen to current Merrick Bank credit cards and accounts has yet to be released. However, since Ally Bank doesn’t currently offer any credit cards, a simple rebrand is possible. Both companies offer several options for high-yield CDs, so that seems likely to remain the case. As pointed out by Ally Financial CEO Jeffrey 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.” By merging under their common values, both companies hope to offer even more quality, customer-centric products.
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Editorial Disclosure – The opinions expressed on BestCards.com's reviews, articles, and all other content on or relating to the website are solely those of the content’s author(s). These opinions do not reflect those of any card issuer or financial institution, and editorial content on our site has not been reviewed or approved by these entities unless noted otherwise. Further, BestCards.com lists credit card offers that are frequently updated with information believed to be accurate to the best of our team's knowledge. However, please review the information provided directly by the credit card issuer or related financial institution for full details.
