FinTech: Goldman Sachs Jettisons GreenSky; To Focus On Core Businesses
“This transaction demonstrates our continued progress in narrowing the focus of our consumer business.” – David Solomon, Chairman and CEO of Goldman Sachs on the sale of GreenSky.
Goldman Sachs (NYSE: GS) has announced its plan to sell the GreenSky platform and associated loan assets to a consortium of institutional investors led by Sixth Street. This significant transaction is set to be completed in the first quarter of 2024, subject to usual closing conditions. David Solomon, Chairman and CEO of Goldman Sachs, emphasized that this move aligns with their strategy of narrowing their focus on core franchises in Global Banking & Markets and Asset & Wealth Management.
While GreenSky is a valuable business, the priority for Goldman is to advance its core strategies, which have shown strong growth and improvement. Goldman Sachs acquired the GreenSky platform in 2021 for $2.24 billion in an all-stock transaction, and said at the time it intended to “create the consumer banking platform of the future.”
This sale of the GreenSky business will have a projected earnings per share impact of $(0.19) on Goldman Sachs’ third-quarter 2023 results. Until the closing of the deal, Goldman Sachs will continue to operate the platform and record business results, including the impact of the Consortium’s agreement to purchase newly originated loans.
The purchasing Consortium, led by Sixth Street, includes funds managed by KKR, Bayview Asset Management, and CardWorks, with significant support from PIMCO and strategic financing from CPP Investments.
GreenSky is known for accelerating business growth for home improvement merchants through innovative payment solutions at the point of sale. The new ownership intends to build on this legacy by enhancing technology and user experiences to drive further growth.
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