Goldman (GS) Works on GreenSky Sale Offers With Other Firms (Revised) – August 30, 2023

The Goldman Sachs Group, Inc. (GS – Free Report) is working on the best and final offers for the sale of GreenSky, its consumer lending unit, with Apollo Global Management, Inc., Pagaya Technologies Ltd., and Sixth Street Specialty Lending, Inc, per a Bloomberg article.

GS is looking for a third round of offer submissions in early September.

Goldman has undertaken a major business restructuring initiative to refocus on its core strengths of investment banking and trading, while reducing its retail footprint. Hence, this sale is an apt fit considering the current strategic overhaul.

GS acquired GreenSky, a pre-eminent fintech platform that offers home-improvement consumer loans, to augment its retail lending footprint. However, this April, the company disclosed its intention to sell GreenSky, with management declaring that the business was not in line with the bank’s “current strategic priorities.”

Goldman has various options regarding the sale of its consumer lending unit. This includes selling the entire unit along with the loans originated to a single buyer, or to different buyers. It could also consider retaining the loans and selling GreenSky.

Apart from divesting its consumer lending platform, GS is scaling back its ambitions to serve the mass consumers and deciding to focus on serving the ultra-rich. Accordingly, it entered into an agreement to divest its Personal Financial Management unit to Creative Planning, a wealth management and registered investment advisor firm. Though the financial terms were not disclosed, the sale will result in a gain and is expected to be completed in the fourth quarter of 2023.

Goldman’s shares have lost 4% over the past six months compared with the industry’s decline of 11%.  

GS presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Inorganic Growth Efforts by Finance Firms

NBT Bancorp Inc. (NBTB – Free Report) completed its previously announced deal to acquire Salisbury Bancorp, Inc on Aug 11. The deal, announced in December 2022, was valued at $204 million.

Under the terms of the agreement, the holders of Salisbury common stock received 0.7450 shares of NBT common stock, which equates to a value of $35 per Salisbury share.

Last month, LPL Financial Holdings (LPLA – Free Report) announced a definitive agreement to acquire the wealth management business of Crown Capital Securities, L.P. The deal marked a significant step for both companies and is expected to be finalized in early 2024, pending regulatory approval and customary closing conditions.

LPLA’s industry-leading platform is expected to provide Crown Capital advisors with enhanced operational support, streamlined processes and access to cutting-edge technology and integrated advisor tools. While Crown Capital advisors will enjoy the benefits of LPL Financial’s robust infrastructure, they will maintain their independence, continuing to serve clients with same dedication and commitment they have exhibited throughout the years.

(We are reissuing this article to correct a mistake. The original article, issued on August 29, 2023, should no longer be relied upon.)

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