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Goldman (GS) to Divest GreenSky to Sixth Street-Led Consortium
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The Goldman Sachs Group, Inc. (GS - Free Report) entered into a definitive agreement to divest its consumer lending platform, GreenSky, and associated loans to a consortium led by investment firm Sixth Street Partners. Subject to the closing conditions, the completion of the deal is expected in the first quarter of 2024.
Though the financial terms of the deal were not disclosed, it is expected to impact Goldman’s third quarter 2023 results with negative 19 cents of earnings per share.
The platform will be managed by Goldman until the conclusion of the transaction. The ongoing business performance will be recorded, including the effect of the consortium's agreement to purchase newly originated loans.
Sixth Street is leading the effort to buy GreenSky. The consortium also includes funds and accounts operated by KKR & Co. (KKR - Free Report) , Bayview Asset Management and CardWorks. PIMCO is backing the deal through asset acquisition and CPP Investments is providing strategic funding.
David Solomon, chairman and CEO of Goldman, stated, “This transaction demonstrates our continued progress in narrowing the focus of our consumer business. While GreenSky is an attractive business, we are focused on advancing the strategy we laid out for our two core franchises. In Global Banking & Markets, we’ve improved our wallet share and are demonstrating strong growth in financing activities; and across our Asset & Wealth Management platform, we are making very strong progress towards both our fundraising and management fee targets.”
Alan Waxman, co-founder and CEO of Sixth Street, said, “GreenSky accelerates business growth for its network of home improvement merchants by delivering innovative payment solutions at the point of sale, and we plan to continue the company’s legacy of driving growth through enhanced technology and great user experiences. Our team has brought together an impressive group of strategic partners to put GreenSky and its experienced leadership team in the best position to succeed going forward.”
Markedly, GreenSky's divestment is part of Goldman’s major business restructuring initiative to focus on its core strengths of investment banking and trading, while reducing its retail footprint.
Over the past three months, shares of the company have lost 4.8% compared with the industry’s fall of 7%.
Wells Fargo & Company (WFC - Free Report) divested around $2 billion of private equity investments in certain funds to a group of leading investors. The move demonstrates the bank’s active investment portfolio management strategy.
Particularly, WFC sold its investment in Norwest Equity Partners and Norwest Mezzanine Partners to a buyer group, including AlpInvest Partners, Atalaya Capital Management, Lexington Partners and Pantheon.
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Goldman (GS) to Divest GreenSky to Sixth Street-Led Consortium
The Goldman Sachs Group, Inc. (GS - Free Report) entered into a definitive agreement to divest its consumer lending platform, GreenSky, and associated loans to a consortium led by investment firm Sixth Street Partners. Subject to the closing conditions, the completion of the deal is expected in the first quarter of 2024.
Though the financial terms of the deal were not disclosed, it is expected to impact Goldman’s third quarter 2023 results with negative 19 cents of earnings per share.
The platform will be managed by Goldman until the conclusion of the transaction. The ongoing business performance will be recorded, including the effect of the consortium's agreement to purchase newly originated loans.
Sixth Street is leading the effort to buy GreenSky. The consortium also includes funds and accounts operated by KKR & Co. (KKR - Free Report) , Bayview Asset Management and CardWorks. PIMCO is backing the deal through asset acquisition and CPP Investments is providing strategic funding.
David Solomon, chairman and CEO of Goldman, stated, “This transaction demonstrates our continued progress in narrowing the focus of our consumer business. While GreenSky is an attractive business, we are focused on advancing the strategy we laid out for our two core franchises. In Global Banking & Markets, we’ve improved our wallet share and are demonstrating strong growth in financing activities; and across our Asset & Wealth Management platform, we are making very strong progress towards both our fundraising and management fee targets.”
Alan Waxman, co-founder and CEO of Sixth Street, said, “GreenSky accelerates business growth for its network of home improvement merchants by delivering innovative payment solutions at the point of sale, and we plan to continue the company’s legacy of driving growth through enhanced technology and great user experiences. Our team has brought together an impressive group of strategic partners to put GreenSky and its experienced leadership team in the best position to succeed going forward.”
Markedly, GreenSky's divestment is part of Goldman’s major business restructuring initiative to focus on its core strengths of investment banking and trading, while reducing its retail footprint.
Over the past three months, shares of the company have lost 4.8% compared with the industry’s fall of 7%.
Image Source: Zacks Investment Research
Currently, GS carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Inorganic Efforts by Another Finance Firm
Wells Fargo & Company (WFC - Free Report) divested around $2 billion of private equity investments in certain funds to a group of leading investors. The move demonstrates the bank’s active investment portfolio management strategy.
Particularly, WFC sold its investment in Norwest Equity Partners and Norwest Mezzanine Partners to a buyer group, including AlpInvest Partners, Atalaya Capital Management, Lexington Partners and Pantheon.