JPMorgan Chase (NYSE:JPM) is ending 2020 with an intriguing acquisition. The big bank is buying a set of customer loyalty specialist assets from cxLoyalty Group Holdings. Neither the price nor the terms of the deal were disclosed.
In the words of the latter company from a press release published Monday afternoon, the assets purchased by JPMorgan Chase include "cxLoyalty's leading technology platforms, full service travel agency, gift card, merchandise, and points bank businesses." The remainder -- cxLoyalty's customer engagement division and "other ongoing businesses" -- will be held by that company's current investors.
With JPMorgan Chase as its owner, those loyalty assets will receive new investments in the technology, content, and servicing areas. cxLoyalty, as the assets are to be known collectively, will be folded into the banking giant's sprawling operations. They will be headed by current cxLoyalty Group Holdings CEO Todd Siegel.
The purchase is anticipated to close within the coming days.
No revenue or profitability estimates for the incoming unit were provided. cxLoyalty Group Holdings wrote that, as a whole, it services 70 million customers and has roughly 3,000 client and marketing partnerships. It added that it has around 3,100 associates in 19 countries. It was not clear how many would transition to JPMorgan Chase as a result of the acquisition, or whether some of those positions would be eliminated.
JPMorgan Chase has not yet publicly commented on the deal.
Though we can't judge the potential impact of this buy on JPMorgan Chase's business, it seems like an intriguing and sensible move for the company. Banks are currently struggling with a tough combination of low interest rates that diminish profitability and a global economy withered by the coronavirus pandemic. In this environment, it's encouraging to see JPMorgan Chase thinking differently in trying to diversify its business somewhat.