03.07.2018 17:44:01

Paypal Closes Synchrony Deal

(RTTNews) - PayPal Holdings, Inc. (PYPL) said Tuesday it has closed the sale of its consumer credit receivables portfolio to Synchrony Financial (SYF). PayPal received about $6.9 billion in total consideration at closing.

Under the terms of the transaction, and related transactions with unaffiliated third parties, Synchrony acquired $7.6 billion in receivables.

This includes PayPal's U.S. consumer credit receivables portfolio, which totaled $6.8 billion at the time of closing, and about $800 million in participation interests in receivables held by unaffiliated third parties.

The sale of the consumer credit receivables portfolio by PayPal is part of its asset light strategy.

Following completion of the transaction, PayPal and Synchrony have extended their existing co-brand consumer credit card program agreement.

Synchrony is now the exclusive issuer of the PayPal Credit online consumer financing program in the U.S., through 2028.

PayPal and Synchrony Bank have partnered since 2004 to offer PayPal-branded consumer credit cards to consumers. 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 will allow PayPal to expand its consumer credit offerings.

Synchrony will update the financial impact of the transaction in its second quarter 2018 earnings call.

PayPal has announced a couple of other acquisitions recently. In June, the company agreed to acquire Simility, a fraud prevention and risk management platform, for $120 million in cash.

The acquisition of Simility is expected to enhance PayPal's ability to deliver fraud prevention and risk management solutions to merchants globally.

In May, PayPal said it has agreed to acquire iZettle, a small business commerce platform in Europe and Latin America, for $2.2 billion.

Upon closing of the deal, PayPal will gain in-store capabilities in the 11 markets: Brazil, Denmark, Finland, France, Germany, Italy, Mexico, Netherlands, Norway, Spain and Sweden.