Ally Financial Inc (NYSE:ALLY), a global provider of automotive finance products and consumer banking, plans to raise $2.5 billion in its upcoming IPO.
The Detroit, Michigan-based firm will offer 95 million shares at an expected price range of $25-$28 per share. If the IPO can reach the midpoint of that range at $26.50 per share, ALLY will command a market value of $12.8 billion.
ALLY filed on March 31, 2011.
Lead Underwriters: Barclays Capital Inc, Citigroup Global Markets Inc, Goldman Sachs & Co, Morgan Stanley & Co LLC
Underwriters: Academy Securities Inc, Blaylock Beal Van LLC, BofA Merrill Lynch, CL King and Associates Inc, Castle Oak Securities LP, Credit Agricole Securities (USA) Inc, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc, Drexel Hamilton LLC, Evercore Group LLC, Freeman & Co Securities LLC, Guggenheim Securities LLC, Height Securities LLC, JP Morgan Securities LLC, JMP Securities LLC, Keefe Bruyette & Woods Inc, Lebenthal & Co LLC, Loop Capital Markets LLC, MFR Securities Inc, Mischler Financial Group Inc, Muriel Siebert & Co Inc, Raymond James and Associates Inc, RBC Capital Markets LLC, Samuel A Ramirez & Company Inc, Sandler O'Neill & Partners LP, Sanford C Bernstein and Co Inc, Scotia Capital Markets, Sea Port Group Securities LLC, SG Americas Securities LLC, Telsey Advisory Group LLC, The Williams Capital Group LLC, The Williams Capital Group LP, Toussaint Capital Partners LLC, Wm Smith & Co
ALLY: In a Nutshell
ALLY is a provider of automotive financing, having offered financial products to auto dealers and their customers for nearly a century, and has much more recently established Ally Bank, a subsidiary that offers direct banking.
The firm primarily serves automotive serves approximately 16,000 auto dealers and approximately four million retail customers, by offering products; including vehicle loans and leases, dealer working capital, and real estate loans, and various forms of insurance.
ALLY's growing banking subsidiary plays to customers that want to operate their accounts almost entirely online, and offers a relatively inexpensive fee structure. The firm had over 1.5 million accounts as of December 31, 2013.
ALLY offers the following figures in its S-1 balance sheet for the year ended December 31, 2013:
Net Income: $361,000,000.00
Total Assets: $151,167,000,000.00
Total Liabilities: $136,959,000,000.00
Stockholders' Equity: $14,208,000,000.00
Big Banks Are ALLY'S Competitors
ALLY faces fierce competition for business in the automotive financing, insurance, and banking markets. Competitors include the likes of Capital One Financial Corp (NYSE:COF), Bank of America Corp (NYSE:BAC), JPMorgan Chase & Co (NYSE:JPM), and many others. Some of ALLY's competitors have access to superior financial resources.
Highly Experienced Management
CEO Michael A. Carpenter has held his current position since 2009. Mr. Carpenter founded Southgate Alternative Investments and previously served as chairman and CEO of Citigroup Alternative Investments. He also worked as chairman and CEO of Citigroup's Global Corporate & Investment Bank and chairman and CEO of Travelers Life & Annuity and vice chairman of Travelers Group Inc.
Mr. Carpenter holds a bachelor of science degree from the University of Nottingham, England, and an MBA from the Harvard Business School.
Investors Should Strongly Consider Buying Into ALLY
We rate this IPO a buy in the proposed price range.
ALLY is making huge profits and shows no signs of slowing down. The company's strong, extensive list of underwriters is further sign of support.
Between its legacy of success in auto finance products and its innovative banking subsidiary, ALLY should have all the tools that its experienced leadership team needs to propel it to future success.
We also believe that ALLY may see a significant boost to its IPO through name recognition.
We would also note that financial IPOs have performed well over the past year.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.