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Ally Financial to acquire TradeKing Group for $275M

Ally FinancialInc. said April 5 that it has agreed to acquire , a digital wealthmanagement company.

The transaction is expected to close in the third quarterand includes an online broker/dealer, a digital portfolio management platform,and educational content and social collaboration channels. TradeKing'smanagement team and workforce of approximately 180 team members will join Allyfollowing the closing of the transaction.

Ally will purchase TradeKing for approximately $275 million,subject to certain purchase price adjustments, representing approximately $250million in premium to the acquired net assets. The transaction is expected tohave a marginal impact on Ally's 2016 and 2017 results due to transactioncosts, and be accretive in 2018 with meaningful growth potential in the futureas consumer preferences drive a greater shift toward digital wealth managementservices, the company said in a release.

The TradeKing acquisition will not impact Ally's plan topursue common stock dividends and a common stock repurchase program as part ofits 2016 capital plan, which is subject to regulatory approval. Ally plans tomove forward with the redemption of approximately $700 million of its series Apreferred stock outstanding; however, Ally will indefinitely defer theredemption of approximately $500 million of its trust preferred securities insupport of this transaction.

The transaction is subject to regulatory approval from theFinancial Industry Regulatory Authority and compliance with theHart-Scott-Rodino Antitrust Improvements Act, and satisfaction of othercustomary closing conditions.

Ally was advised on this transaction by Goldman Sachs &Co., Jarrett Lilien and Sullivan & Cromwell LLP. TradeKing was advised byBank of America Merrill Lynch and Cooley LLP.

TradeKing Group consists of , andTKconnect LLC.