Synchrony Financial to Acquire U.S. Consumer
Credit Receivables from PayPal, Companies Extend Co-Brand Credit
Card Relationship
PayPal Holdings, Inc. (NASDAQ:PYPL) and Synchrony Financial
(NYSE:SYF) today announced an agreement to significantly expand
their strategic consumer credit relationship. Under the terms of
the transaction, Synchrony Financial will acquire $6.8 billion in
receivables, including PayPal’s U.S. consumer credit receivables
portfolio, which totaled approximately $5.8 billion in receivables
as of October 31, 2017, and approximately $1 billion in
participation interests in receivables held by certain investors
and a chartered financial institution. Subject to regulatory
approval and other customary conditions, this transaction is
expected to close in the third quarter of 2018.
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In addition, at closing, PayPal and Synchrony Bank will extend
the existing co-brand consumer credit card program agreement, and
Synchrony Bank will also become the exclusive issuer of the PayPal
Credit online consumer financing program, in the U.S. for 10
years.
“Providing great payments experiences to our customers is at the
core of everything we do,” said Dan Schulman, President and CEO of
PayPal. “Our expanded relationship with Synchrony Financial will
free up cash currently used to fund consumer credit receivables for
other uses, while accelerating our ability to deliver engaging
credit and payments experiences for our customers. We believe this
transaction significantly advances our strategic and financial
goals.”
“This collaboration builds on a key partner relationship in the
rapidly growing digital payments space and expands our capabilities
within the merchant environment,” said Margaret Keane, President
and Chief Executive Officer of Synchrony Financial. “The
partnership with PayPal extends our expertise in advanced analytics
and underwriting across all digital channels, providing deeper
insights into the unique needs of the PayPal customer.”
Since 2004, PayPal and Synchrony Bank have partnered to offer
PayPal-branded consumer credit card options that enable cardholders
to shop online and in stores. PayPal and Synchrony Bank will be
expanding their program agreement to include the PayPal Credit
online consumer financing program available to PayPal’s U.S.
customers. Through this expanded relationship, PayPal will continue
to provide access to innovative consumer credit products, while
Synchrony Bank will provide program management capabilities. This
transaction enables PayPal to control customer-facing activities,
which aligns with PayPal’s strategy of enhancing the consumer
experience, while simultaneously allowing for more efficient
capital allocation.
Online consumer financing has been a strategic offering of the
PayPal platform since 2008, and is a proven driver of consumer and
merchant engagement. The expanded agreement with Synchrony Bank for
both the U.S. PayPal Credit online consumer financing program and
the U.S. PayPal-branded consumer credit card program complements
PayPal’s successful partnering strategy and allows PayPal to
collaborate with an industry leader to enrich and expand PayPal’s
consumer credit offerings. The expanded relationship will enable
innovative customer experiences by leveraging the joint
capabilities and strengths of each company.
BofA Merrill Lynch acted as the financial advisor to PayPal.
Morgan Stanley & Co. LLC acted as the financial advisor to
Synchrony Financial.
PayPal will host a conference call to discuss the
transaction at 5:30 a.m. Pacific Standard Time (PST) today. A live
webcast of the conference call, together with a slide presentation,
can be accessed through the company's Investor Relations website
at https://investor.paypal-corp.com. In addition, an
archive of the webcast will be accessible for 90 days through the
same link.
About PayPal
Fueled by a fundamental belief that having access to financial
services creates opportunity, PayPal (Nasdaq: PYPL)
is committed to democratizing financial services and
empowering people and businesses to join and thrive in the global
economy. Our open digital payments platform gives PayPal's 218
million active account holders the confidence to connect and
transact in new and powerful ways, whether they are online, on a
mobile device, in an app, or in person. Through a combination of
technological innovation and strategic partnerships,
PayPal creates better ways to manage and move money,
and offers choice and flexibility when sending payments, paying or
getting paid. Available in more than 200 markets around the
world, the PayPal platform, including Braintree,
Venmo and Xoom, enables consumers and merchants to receive
money in more than 100 currencies, withdraw funds in 56 currencies
and hold balances in their PayPal accounts in 25
currencies. For more information on PayPal,
visit https://www.paypal.com/about.
For PayPal financial information,
visit https://investor.paypal-corp.com.
Forward Looking Statements About PayPal
This announcement contains “forward-looking” statements within
the meaning of applicable securities laws. Forward-looking
statements and information relate to future events and future
performance and reflect, among other things PayPal’s expectations
regarding the anticipated benefits of this transaction and the
timing of the closing of the transaction. Forward looking
statements may be identified by words such as “seek”, “believe”,
“plan”, “estimate”, “anticipate”, expect”, “intend”, and statements
that an event or result “may”, “will”, “should”, “could”, or
“might” occur or be achieved and any other similar expressions.
Forward-looking statements involve risks and uncertainties which
may cause actual results to differ materially from the statements
made. Factors that could cause or contribute to such differences
include, but are not limited to, the timing and possible outcome of
regulatory approvals in connection with the transaction, the
possibility that the transaction may not close, and the possibility
that the anticipated benefits of the transaction may not be
realized. More information about these and other factors can be
found in PayPal Holdings, Inc.’s most recent Annual Report on Form
10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K
and other filings with the Securities and Exchange Commission (the
“SEC”), and its future filings with the SEC.
There are no assurances PayPal can fulfill forward-looking
statements and information. Such forward-looking statements and
information are only predictions based on current information
available to the PayPal management team as of the date that such
predictions are made; actual events or results may differ
materially as a result of risks facing PayPal, some of which are
beyond PayPal’s control. Although PayPal believes that any
forward-looking statements and information contained in this press
release are based on reasonable assumptions, readers cannot be
assured that actual outcomes or results will be consistent with
such statements. Accordingly, readers should not place undue
reliance on forward-looking statements and information.
About Synchrony Financial
Synchrony Financial (NYSE: SYF) is one of the nation’s premier
consumer financial services companies. Our roots in consumer
finance trace back to 1932, and today we are the largest provider
of private label credit cards in the United States based on
purchase volume and receivables.* We provide a range of credit
products through programs we have established with a diverse group
of national and regional retailers, local merchants, manufacturers,
buying groups, industry associations and healthcare service
providers to help generate growth for our partners and offer
financial flexibility to our customers. Through our partners’ over
365,000 locations across the United States and Canada, and their
websites and mobile applications, we offer our customers a variety
of credit products to finance the purchase of goods and services.
Synchrony Financial offers private label credit cards, Dual Card™,
and general purpose co-branded credit cards, promotional financing
and installment lending, loyalty programs and FDIC-insured savings
products through Synchrony Bank. More information can be found at
www.synchronyfinancial.com, facebook.com/SynchronyFinancial,
www.linkedin.com/company/synchrony-financial and
twitter.com/SYFNews.
* Source: The Nilson Report (June 2017, Issue # 1112) - based on
2016 data.
Forward Looking Statements About Synchrony Financial
This announcement contains certain forward-looking statements
within the meaning of applicable securities laws. Forward-looking
statements may be identified by words such as “expects,” “intends,”
“anticipates,” “plans,” “believes,” “seeks,” “targets,” “outlook,”
“estimates,” “will,” “should,” “may” or words of similar meaning,
but these words are not the exclusive means of identifying
forward-looking statements. Forward-looking statements are based on
management’s current expectations and assumptions, and are subject
to inherent uncertainties, risks and changes in circumstances that
are difficult to predict. As a result, actual results could differ
materially from those indicated in these forward-looking
statements.
We caution you against relying on any forward-looking
statements, including those that are included in our public
filings, which should be read in conjunction with the other
cautionary statements that are included in our public filings,
including under the heading “Risk Factors” in the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2016, as
filed on February 23, 2017. You should not consider any list of
such factors to be an exhaustive statement of all of the risks,
uncertainties, or potentially inaccurate assumptions that could
cause our current expectations or beliefs to change. Further, any
forward-looking statement speaks only as of the date on which it is
made, and we undertake no obligation to update or revise any
forward-looking statement to reflect events or circumstances after
the date on which the statement is made or to reflect the
occurrence of unanticipated events, except as otherwise may be
required by law.
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version on businesswire.com: http://www.businesswire.com/news/home/20171116005704/en/
For PayPalInvestors:Gabrielle RabinovitchVice
President, Investor
Relationsgrabinovitch@paypal.comorMedia:Amanda Miller,
408-219-0563Director, Corporate
Communicationsamanmiller@paypal.comFor Synchrony
FinancialInvestors:Greg Ketron, 203-585-6291Investor
Relationsinvestorrelations@syf.comorMedia:Lisa Lanspery,
203-585-6143Corporate CommunicationsLisa.Lanspery@syf.com
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