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Goldman to buy speciality lender GreenSky for $2.2bn

What’s New in Goldman Sachs Group

Goldman Sachs has agreed to buy online loan provider Green Sky for $ 2.2 billion as New York investment banks are further shifting to becoming more traditional lenders with stable returns. ..

US investment banks will pay GreenSky shareholders $ 12.11 worth of shares per share. This is a premium of over 50% of the company’s current stock price. GreenSky shareholders will receive 0.03 Goldman Sachs common stock per share.

GreenSky, a fintech platform that provides loans for temporary expenses such as construction work, saw its share price rise by 52% in pre-market transactions.

This is a multi-billion dollar acquisition by Goldman Chairman and CEO David Solomon in less than a month, making Wall Street’s most respected investment bank more consumer-centric. It highlights his intention to turn into a financial institution.

Goldman’s wealth management division has acquired Dutch insurance company NN Group for € 1.6 billion. last month Expand the bank’s presence in Europe. The acquisition of GreenSky is the largest acquisition since Solomon acquired in 2018.

Goldman has consistently diversified its portfolio and invested in its business since launching consumer bank Marcus five years ago. Solomon has been the driving force behind this effort since he took the lead in trying to reduce banks’ reliance on volatile businesses such as equity and fixed income.

“Our desire for Marcus to become a retail banking platform in the future is clear, and the acquisition of GreenSky advances this goal,” Solomon said.

“Green Sky … Marcus will be able to reach and offer a growing set of solutions to a new and active set of merchants and customers.”

GreenSky was released in 2018 with a valuation of $ 4 billion, but its share price is consistently below the $ 23 IPO price. This was one of many online businesses that promised to disrupt traditional banking, but was hampered by the increase in loan defaults and struggled to do so. The company’s stock price has fallen almost 70% since its listing.

GreenSky is one of the many lenders that work directly with sellers to provide loans for goods and services and drive sales. The so-called “buy now and pay later” sector is gaining in popularity this year, but regulators are starting to crack down on their businesses.

Atlanta-based fintech companies are currently servicing a $ 9 billion loan portfolio. Founded by David Zalik in 2006, approximately 4 million consumers have used the technology to fund commerce worth $ 30 billion.

In July, the Consumer Financial Protection Bureau fined GreenSky $ 2.5 million for allowing sellers to take out loans on behalf of consumers without permission.

Goldman to buy speciality lender GreenSky for $2.2bn Source link Goldman to buy speciality lender GreenSky for $2.2bn

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