Please ensure Javascript is enabled for purposes of website accessibility

Synchrony Financial Acquires Allegro Credit

By Eric Volkman - Jan 26, 2021 at 6:19PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company didn't disclose how much it's paying for its asset-to-be.

Synchrony Financial (SYF 4.68%) is soon to be one asset larger if an agreed deal goes through. The store payment card specialist announced Tuesday that it has signed a definitive agreement to acquire privately held Allegro Credit. The price of the transaction was not disclosed.

Owning Allegro would complement Synchrony's client base, which is still concentrated on the retail stores that have collectively taken an enormous hit due to the economic fallout of the coronavirus pandemic. The somewhat eclectic Allegro specializes in consumer financing solutions for audiology products, musical instruments, and dental services. Its point-of-sale service network covers 3,200 merchants.

A person in a clothing store holding a tablet.

Image source: Getty Images.

"The acquisition advances Synchrony's growth and diversification strategy and accelerates its industry leading digital innovation, expanding choice at the point-of-sale for its providers, merchants and customers," Synchrony wrote in the press release trumpeting the deal.

Much of Allegro's business will be folded into Synchrony's CareCredit, its health and wellness financing unit. 

Despite its enthusiasm for the acquisition, Synchrony said that it is "not expected to have a material impact," on its financials. The deal is expected to close this quarter.

Without knowing how much Synchrony is paying for Allegro, it's tough to get a fix on whether this is a good deal for the company. But leaving financial questions aside, it feels like a very sensible move for it to push into new or underdeveloped customer segments.

Investors, however, might be seeing things differently. On Tuesday, they seemed to indicate their displeasure by trading Synchrony stock down by 3.4%, a far steeper decline than that of the S&P 500 index on the day.


Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Synchrony Financial Stock Quote
Synchrony Financial
$29.54 (4.68%) $1.32

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.