06 Apr Ally Financial Buys Online Broker TradeKing
On Tuesday April 5th Detroit-based auto lender Ally Financial announced the purchase of Fort Lauderdale-based online broker and wealth management company TradeKing Group for approximately USD 275,000. This acquisition is motivated by Ally’s desire to expand their digital financial services offering to include online wealth management, and is part of their plan to add wealth management, credit cards and mortgages to its franchise, according to a company press release.
TradeKing offers both an online brokerage service for self-directed investors and a digital wealth management service. TradeKing currently holds approximately USD 4.5 billion client assets, around USD 1.1 billion of cash and cash investments, 260,000 funded accounts and 20,000 daily average revenue trades (DARTs).
Ally will purchase TradeKing for around USD 275 million, subject to purchase price adjustments, representing approximately USD 250 million in premium to the acquired net assets. The transaction is expected to have a minimal impact on Ally’s 2016 and 2017 results due to transaction costs, and be accretive by 2018.
Ally Financial’s CEO Jeffrey Brown stated that, “the addition of wealth management is the next key step in Ally’s digital product evolution and will create a powerful combination of segment-leading direct banking and innovative investment services in a single integrated customer experience.” Furthermore, he believes that, “the trend toward digitally-based financial services continues to gain momentum with consumers in general, and we see even greater opportunities ahead as the millennial generation begins to require a broader selection of financial products, including wealth management. We see strong alignment between Ally’s loyal and digitally-savvy customer base and TradeKing’s innovative, client-centric business.”
While TradeKing CEO Don Montanaro stated that, “we are thrilled to have found a partner who shares our core philosophy of delivering a great client experience digitally and through multiple channels,” and that he and his team “look forward to being part of this modern digital financial services company.”
The deal is expected to close in the third quarter of 2016, subject to customary closing conditions.
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