Why Goldman Sachs (GS) Is Buying People Corporation For $1.13 Billion

By Amit Chowdhry ● December 18, 2020
  • The Merchant Banking Division of Goldman Sachs Group Inc (NYSE: GS) announced recently that it entered into an arrangement agreement that it will acquire all of the issued and outstanding common shares of People Corporation for $15.22 per share in cash for a total value of $1.13 billion.

The Merchant Banking Division of Goldman Sachs Group Inc (NYSE: GS) announced recently that it entered into an arrangement agreement that it will acquire all of the issued and outstanding common shares of People Corporation for $15.22 per share in cash, representing a total equity value of approximately $1.13 billion.

The purchase price represents a 37% premium to the 20-day volume-weighted average price per share for the period ending on December 11, 2020, and a 36% premium to the closing price on December 11, 2020.

People Corporation and Goldman Sachs are fully aligned on and committed to People Corporation’s strategy of growth both organically and through acquisition. And People Corporation will continue to be led by Laurie Goldberg, Executive Chairman and Chief Executive Officer of the company, and the current senior leadership team from its corporate office in Winnipeg, Manitoba, and over 40 offices throughout the country. There are no changes are expected to People Corporation’s personnel, service model and standards, or operating principles.

The deal is the result of a review of strategic alternatives for People Corporation, considering the interests of all stakeholders, including shareholders, clients, partners, and employees, undertaken by a special committee of independent directors of People Corporation. And the review resulted in a comprehensive process focused on maximizing value for People Corporation’s shareholders and involved discussions with a broad range of potential strategic buyers and financial sponsors. The deal is the outcome of that process and is unanimously supported by People Corporation’s Board of Directors.

KEY QUOTES:

“This Transaction delivers tremendous value for our shareholders while creating the conditions that will enable our team to write People Corporation’s next chapter. As a private company with a committed, well-capitalized and long-term owner, People Corporation will accelerate its scale in talent and technology, consistent with its commitment to bring to bear industry-leading group benefits, group retirement and HR solutions to each client engagement, delivered by its best-in-class consultants across its national platform. I look forward to continuing to lead our outstanding team as we look to the future.”

— Laurie Goldberg, Executive Chairman and Chief Executive Officer of People Corporation

“This transaction is an excellent opportunity for People Corporation’s shareholders, and for the (People Corporation) clients, partners, employees and other stakeholders. The Transaction recognizes the value of People Corporation’s growth, success, and long-term track record of delivering shareholder returns. The Purchase Price represents a significant premium to both current and historical trading prices for People Corporation’s shares. We are confident that the partnership with Goldman Sachs will enhance the (People Corporation’s) ability to pursue its long-term vision and ensure that People Corporation continues to be a leader in the industry.”

— Scott Anderson, Chairman of the Special Committee of independent directors of People Corporation

“We are thrilled to be a part of the next phase of the People Corporation story. (People Corporation) has a compelling client offering with experienced consultants and a national scale that have helped deliver outstanding organic growth over time. There is also a continued and meaningful investment opportunity to deploy capital and access opportunities in People Corporation’s core and adjacent markets. We look forward to working with Laurie and the rest of the management team to build upon what has made People Corporation so successful.”

— Anthony Arnold, Managing Director at Goldman Sachs