Goldman Sachs Group, Inc. has announced its decision to sell the GreenSky platform and loan assets to a group of institutional investors headed by Sixth Street in a strategic move to streamline its consumer business. The transaction, projected to conclude in the first quarter of 2024 pending customary closing conditions, marks a significant step forward for both entities.
Goldman Sachs Chairman and CEO, David Solomon, emphasized the firm's commitment to refining its core franchises in Global Banking & Markets and Asset & Wealth Management. Solomon stated, "This transaction demonstrates our continued progress in narrowing our consumer business. Although GreenSky is appealing, we are focused on improving our strategy for our two key franchises." This shift in focus reflects the company's dedication to optimizing its operations in alignment with its long-term strategic goals.
Sixth Street, a financial powerhouse with over $74 billion in assets under management and committed capital, spearheads the consortium. Their extensive experience in flexible financing and data-enabled capabilities uniquely positions them to foster growth for GreenSky's network of home improvement merchants. Sixth Street co-founder and CEO, Alan Waxman, expressed confidence in the acquisition, emphasizing the consortium's commitment to preserving GreenSky's legacy of innovation and user-centric experiences.
The consortium includes industry heavyweights such as KKR, Bayview Asset Management, and CardWorks assets and accounts, bolstering the acquisition with their collective expertise. PIMCO's asset acquisition and CPP Investments' strategic financing further fortify the transaction, underscoring the broad-based support for the endeavor.
Goldman Sachs will continue to oversee the platform and report business results, including the consortium's acquisition of newly generated loans, until the closing of the transaction. While this move is anticipated to have a minor impact on Goldman Sachs' third-quarter 2023 earnings per share (EPS) of approximately $0.19, the long-term benefits of the strategic realignment are expected to far outweigh this short-term adjustment.
Wells Fargo Securities, LLC, serves as the principal financial advisor to the consortium, while Simpson Thacher & Bartlett LLP and Alston & Bird LLP provide legal counsel. BofA Securities and Mizuho Americas act as financial advisors in this landmark transaction.
As the transaction proceeds towards its anticipated completion in early 2024, the financial landscape eagerly awaits the unfolding of this strategic maneuver.