Goldman Sachs Group Updates
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Goldman Sachs has agreed to buy online loan provider GreenSky for $ 2.2 billion as the New York investment bank deepens its move to a more traditional, stable-income lender.
The US investment bank pays GreenSky shareholders the equivalent of $ 12.11 per share in stock, a premium of more than 50 percent over the company’s current share price. GreenSky shareholders will receive 0.03 of Goldman Sachs’ ordinary shares per share.
GreenSky, a fintech platform offering one-time loans such as construction, has seen its share price rise 52% in pre-market trading.
This is the second multibillion-dollar acquisition by David Solomon, Goldman’s chairman and CEO, in less than a month, highlighting his intention to turn Wall Street’s most respectable investment bank into a more consumer-oriented financial institution.
Goldman’s asset management unit acquired Dutch insurer NN Group for € 1.6 billion last month to expand the bank’s presence in Europe. The acquisition of GreenSky is the largest that Solomon has carried out since taking over in 2018.
Since starting his consumer bank Marcus five years ago, Goldman has consistently diversified its portfolio and invested in the business. Solomon has been a driving force for this effort since he was at the helm when he tried to reduce the bank’s confidence in volatile issues such as equities and bonds.
“We were clear in our quest that Marcus would become the consumer banking platform of the future, and the acquisition of GreenSky promotes this goal,” Solomon said.
“GreenSky. . . will allow Marcus to reach a new and active set of retailers and customers and offer them a greater number of solutions.
GreenSky was announced in 2018 with a valuation of $ 4 billion, but the share price of the company has consistently traded below the $ 23 exchange price. This was among a number of online businesses that promised to disrupt traditional banking but struggled with increasing defaults. The company’s share price has been down nearly 70 percent since its listing.
GreenSky is one of the many lenders that work directly with retailers to offer financing for goods and services to help them increase sales. The so-called ‘buy now pay later’ sector became popular this year, but regulators began to curb the business.
The Atlanta-based fintech company currently offers a $ 9 billion loan portfolio. Since its inception in 2006 by David Zalik, approximately 4 million consumers have used its technology to finance $ 30 billion in trade.
In July, the Consumer Financial Protection Bureau fined GreenSky $ 2.5 million for allowing consumers to take out loans on behalf of consumers without permission.