Why Goldman Sachs (GS) Is Buying GreenSky (GSKY) For $2.24 Billion

By Amit Chowdhry ● Sep 15, 2021
  • Goldman Sachs Group Inc (NYSE: GS) announced it is buying GreenSky, Inc. (NASDAQ: GSKY) in a deal valued at about $2.24 billion. These are the details.

Goldman Sachs Group Inc (NYSE: GS) and GreenSky, Inc. (NASDAQ: GSKY) today announced that they have entered into a definitive agreement pursuant to which Goldman Sachs will acquire GreenSky — the largest fintech platform for home improvement consumer loan originations — in an all-stock transaction valued at about $2.24 billion. And GreenSky’s differentiated lending capabilities and market-leading merchant and consumer ecosystem will help accelerate the efforts of Goldman Sachs to create the consumer banking platform of the future, helping tens of millions of customers take control of their financial lives and drive higher, more durable returns.

This acquisition will enhance Goldman Sachs’ ability to provide consumers with the opportunity to save, spend, borrow and invest, and meet customers where they transact. And since its founding, GreenSky has provided simple and transparent home improvement financing solutions for approximately 4 million customers. GreenSky has a growing network of more than 10,000 merchants and helps them accelerate their business by incorporating a seamless financing experience into their commerce flow. Connecting GreenSky’s unique capabilities and growing user base with the expanding products of Marcus by Goldman Sachs creates a compelling banking platform positioned for significant growth.

In just 5 years, the consumer business of Goldman Sachs has made significant progress toward its goal in providing an integrated and customer-centric digital offering that enables customers to take control of their financial lives. And this transaction is consistent with that vision and Goldman Sachs’ strategy to meet consumers through proprietary channels and through the ecosystems of leading companies with embedded technology.

As part of the deal, GreenSky stockholders will receive 0.03 shares of common stock of Goldman Sachs for each share of GreenSky Class A common stock. And based on the closing share price of Goldman Sachs common stock as of September 14, 2021, this represents a per-share price for GreenSky Class A common stock of $12.11 and an implied transaction value of approximately $2.24 billion. In connection with the deal, GreenSky’s tax receivable agreement was amended to provide that no payments will be made in respect of or following the transaction; these payments would have had an approximate value of $446 million or $2.41 per share.

The Boards of Directors of Goldman Sachs and GreenSky have approved the transaction. And the Board of Directors of GreenSky, acting upon the unanimous recommendation of a special committee composed of independent directors of the Board, recommends that GreenSky stockholders approve the transaction and adopt the merger agreement. The deal – which is anticipated to close in the fourth quarter of 2021 or first quarter of 2022 – is subject to approval by GreenSky stockholders, the receipt of required regulatory approvals, and satisfaction of other customary closing conditions.

KEY QUOTES:

“We have been clear in our aspiration for Marcus to become the consumer banking platform of the future, and the acquisition of GreenSky advances this goal. GreenSky and its talented team have built an impressive, cloud-native platform that will allow Marcus to reach a new and active set of merchants and customers and provide them with an expanding set of solutions. We welcome the GreenSky team to the Goldman Sachs family.”

— David M. Solomon, Chairman and CEO of Goldman Sachs

“The GreenSky team and I are thrilled to be joining Goldman Sachs. From GreenSky’s inception, our mission has been to deliver exceptional value helping businesses grow and delight their customers. In combination with Goldman Sachs, we’re excited to continue delivering innovative point-of-sale payment solutions for our merchant partners and their customers on an accelerated basis.”

— David Zalik, Chief Executive Officer of GreenSky

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.