Ally Financial, one of the top players in the automotive finance business, said it will buy credit card company Fair Square Financial for $750 million.
The all-cash deal is expected to close at the end of the first quarter of 2022, Ally said Thursday in a statement.
“Our announcement to acquire Fair Square Financial — a digital-first credit card company — aligns with our long-term strategy to be the leading full-service digital-bank,” Ally CEO Jeffrey Brown said in the statement. “The addition of credit card complements our existing offerings, adding a growing, customer-focused product with attractive risk-adjusted returns.”
Ally said the purchase gives it a “scalable, digital-first credit card platform.”
Ally said the acquisition delivers 658,000 cardholders and $763 million in loan balances. The average customer has a 657 FICO score and a $2,300 line of credit.
It expects the deal to begin building profits in 2023.