Goldman Sachs Group (NYSE:GS) is reportedly close to finalizing a deal to offload its GreenSky operation, with the potential buyers being Sixth Street (TSLX), Pacific Investment Management, and KKR (KKR). The transaction, which is expected to be worth approximately $500 million, would allow these firms to acquire a loan-origination business at a beneficial price. However, the final terms of the deal are yet to be confirmed.
This move comes after Goldman Sachs acknowledged that its acquisition of GreenSky in 2021, valued at around $1.7 billion in stock, was overpriced. The financial services giant had written down $504 million of goodwill from its consumer division in July this year, reflecting this overvaluation.
The decision to sell GreenSky is part of Goldman Sachs' strategic plan to divest from non-core businesses. This strategy has been implemented particularly as the firm's traditional mainstay - capital markets activity - has seen a surge in recent weeks. Goldman Sachs has notably served as the lead underwriter for the initial public offerings of Arm Holdings (NASDAQ:ARM), Instacart (CART), and Klaviyo (KVYO), marking some of the most significant market debuts this year.
For the buyer consortium led by Sixth Street, acquiring GreenSky offers an opportunity to expand into lending segments that many banks have been reluctant to explore. This strategic move comes during a period when rising interest rates have posed balance-sheet challenges for banks due to depreciating bondholding values.
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