Goldman Sachs set to selloff fintech arm

Goldman Sachs, under the leadership of CEO David Solomon, is in the process of selling its fintech platform, GreenSky, to a consortium led by Sixth Street’s CEO Alan Waxman, co-founder Michael Muscolino, and Head of Asset Based Finance Michael Dryden. The consortium also includes prominent entities such as KKR, Bayview Asset Management, CardWorks, and has significant backing from PIMCO through asset acquisition and CPP Investments’ strategic financing.

The completion of this deal is scheduled for the first quarter of 2024, during which Goldman Sachs will maintain operational control over GreenSky. This divestment aligns with Goldman Sachs’ strategic focus on its two core franchises, namely Global Banking & Markets and Asset & Wealth Management. This shift in strategy has yielded positive outcomes, including an increased market share and robust growth, while also making substantial progress toward fundraising and management fee targets.

GreenSky, established in 2016, specialises in providing innovative point-of-sale payment solutions and has financed more than $30 billion in various business improvements across sectors like healthcare, retail, and eCommerce. The company has facilitated home improvement financing for approximately four million customers.

Goldman Sachs originally acquired GreenSky during the peak of the COVID-19 pandemic in September 2021, in an all-stock deal valued at around $2.24 billion. The acquisition was driven by the surge in home renovation activities during the pandemic. However, the business encountered challenges in the wake of rising interest rates and increasing costs in the post-pandemic period.

The consortium’s strategic vision for GreenSky involves driving growth through technology enhancement and improving user experiences, all while continuing the company’s legacy of supporting the growth of home improvement merchants.

Several advisors are involved in facilitating this transaction, including Goldman Sachs & Company and Wachtell, Lipton, Rosen & Katz for Goldman Sachs, and Wells Fargo Securities, BofA Securities, Mizuho Americas, Simpson Thacher & Bartlett, and Alston & Bird for the Consortium.