Goldman Sachs Group is reportedly close to finalizing the sale of its GreenSky business, a deal that could benefit both the buyers and the seller.
If the deal goes through, Goldman would have the opportunity to offload a business that it may have regretted acquiring, although at a substantially lower price than what it initially paid. On the other hand, Sixth Street, Pacific Investment Management, KKR, and other potential buyers in the consortium would acquire a loan-origination business at an attractive price.
Back in 2021, Goldman purchased GreenSky for approximately $1.7 billion worth of stock. However, in July, the company wrote down $504 million of goodwill from its consumer business, acknowledging that GreenSky did not hold the same value as initially anticipated. Now, by monetizing the asset, it is evident that the value has further declined, with reports suggesting that the sale to the consortium could be around $500 million, subject to potential changes in terms.
While Goldman may not see a financial gain from this deal, it does allow them to divest from a noncore business at a time when their primary focus on capital-markets activity is growing. In recent weeks, Goldman has played a significant role as lead underwriter for notable IPOs including Arm Holdings, Instacart, and Klaviyo.
Conversely, Sixth Street and its partners stand to gain exposure in lending areas where some banks are becoming more apprehensive. The concerns arise from higher interest rates leading to worries about the value of bondholdings on banks' balance sheets.