Ally Financial announced that it has entered into a definitive agreement to acquire CardWorks in a transaction valued at approximately $2.65B. Cardworks is a privately held company with $4.7B in assets and $2.9B in deposits. Under the terms of the agreement, Merrick Bank, a wholly owned subsidiary of CardWorks, Inc., will merge into Ally Bank. Consideration for the transaction will include approximately $1.35B of cash and $1.3B in Ally common stock, or 39.5M shares. The merger consideration remains subject to closing equity and other adjustments and fill-or-kill rights. Don M. Berman, Chairman, Chief Executive Officer and Founder of CardWorks, owns 70% of CardWorks and will receive a combination of cash and Ally common stock as his consideration. Shares of Ally common stock granted to Mr. 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 Mr. Berman can sell or transfer up to one-third of his shares. On each subsequent anniversary, Mr. Berman will be permitted to sell or transfer up to another one-third of his shares. As a result, three years after close of the transaction, Mr. Berman may sell or transfer any remaining shares of Ally common stock. Mr. Berman will join Ally’s Board of Directors and become a member of Ally’s executive management team following closing. The acquisition, which is subject to customary regulatory approvals and closing conditions, is expected to close in the third quarter of 2020. Each company’s board of directors has unanimously approved the acquisition.