Synchrony Financial to Acquire U.S. Consumer Credit Receivables from
PayPal, Companies Extend Co-Brand Credit Card Relationship
SAN JOSE, Calif. & STAMFORD, Conn.--(BUSINESS WIRE)--
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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For PayPal
Investors:
Gabrielle
Rabinovitch
Vice President, Investor Relations
grabinovitch@paypal.com
or
Media:
Amanda
Miller, 408-219-0563
Director, Corporate Communications
amanmiller@paypal.com
For
Synchrony Financial
Investors:
Greg Ketron,
203-585-6291
Investor Relations
investorrelations@syf.com
or
Media:
Lisa
Lanspery, 203-585-6143
Corporate Communications
Lisa.Lanspery@syf.com
Source: PayPal Holdings, Inc.
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