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#DON BERMAN CARDWORKS PRO#

He will join Ally Financial's board and executive management team following closing, according to a news release from CardWorks. As a result, three years after the close of the transaction, Berman may sell or transfer any remaining Ally Financial common shares.īerman will continue to oversee the CardWorks business lines as part of Ally Financial. On each subsequent anniversary, Berman will be permitted to sell or transfer up to another one-third of his shares. Ally Financial common shares granted to Berman will be subject to a lock-up agreement restricting the sale or transfer of 100% of his shares until the one-year anniversary of the closing date, at which point he can sell or transfer up to one-third of his shares. The merger consideration remains subject to closing equity and other adjustments and fill-or-kill rights.ĬardWorks Chairman and CEO Don Berman, who owns 70% of the company, will receive a combination of cash and Ally Financial common stock as his consideration. The consideration for the deal will include about $1.35 billion of cash and $1.30 billion in Ally Financial common stock, or 39.5 million shares based on Ally Financial's closing share price on Feb. Under the terms of the deal, CardWorks unit Merrick Bank Corp. in a cash-and-stock deal valued at about $2.65 billion. agreed to acquire nonprime credit card and consumer finance lender CardWorks Inc. The stock’s dividend yield is 2.31%.Ally Financial Inc. The stock’s 52-week range is $25.80 to $35.42, and the consensus price target on the stock is $39.17. The deal is expected to close in the third quarter of this year, pending regulatory approvals and other closing conditions.Īlly stock traded down more than 11% at $28.39 about half an hour after the opening bell Wednesday.

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The company is a leading provider of non-prime credit cards and consumer lending.Īmong the strategic benefits Ally calls out is, “Immediate enhancement of Ally’s revenues and earnings stream through strong portfolio risk-adjusted returns and diversified fee and interchange revenue.” Ally noted that on a pro forma basis, in the 2019 fiscal year, CardWorks would have increased adjusted net revenue by 17% and adjusted pretax income by 18%.

#DON BERMAN CARDWORKS FULL#

In leveraging Ally’s commitment to innovation and adaptiveness, the combined company will be well-positioned to meet the financial needs of our ever-growing customer base and deliver sustainable growth and performance.ĬardWorks has $4.7 billion in assets and $2.9 billion in deposits and brings to Ally an established credit card platform, full service and recovery operations, and a national merchant acquiring business. On each of the next three annual anniversaries, Berman may sell up to one-third of his Ally stock, including all unsold shares at the fourth anniversary of the transaction.ĬardWorks 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.Īt 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. All his stock is subject to a lock-up period of one year on all shares. Berman also will get a seat on Ally’s board and will join the company’s executive management team. Berman, owns 70% of CardWorks and will receive a combination of cash and Ally common stock.

The open-ended nature of a kill-or-fill adjustment added to the dilution from the stock portion of the deal itself weighed heavily on Ally’s shares Wednesday morning.ĬardWorks founder and CEO, Don M.

Such an adjustment may arise if Ally’s stock price declines by more than 15%, a kill-or-fill termination right is exercised and Ally elects to fill by issuing additional stock. The price is based on Ally’s forecast of closing equity and other adjustments, excluding any possible kill-or-fill adjustment. The deal includes approximately $1.35 billion in cash and $1.3 billion in new shares (39.5 million) of Ally common stock.Īccording to the announcement, the share number is based on Ally’s closing stock price of $32.85 on February 14. (NYSE: ALLY) announced Wednesday that it has agreed to acquire privately held CardWorks in a cash and stock transaction valued at $2.65 billion. Financial services firm Ally Financial Inc.

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