Goldman Sachs acquires digital lender GreenSky to boost consumer banking

Goldman Sachs on Wednesday agreed to buy GreenSky, a fintech platform that provides home improvement loans, in an all-stock deal valued at $2.24 billion, as the Wall Street bank looks to grow its consumer unit.

Atlanta-based GreenSky, which went public in 2018 at a valuation of about $4 billion, has provided home improvement loans to about 4 million customers since being founded in 2006.

Digital businesses that bring in new customers or unique technologies have become more attractive, with the pandemic boosting the importance of online activity, while the role of bank branches diminishes.

The deal implies a price of $12.11 for each GreenSky share, representing a 56% premium to the company’s closing price on Tuesday.

Its purchase will further bulk up Goldman’s consumer banking unit Marcus, named after one of the bank’s founders and a key plank of Chief Executive David Solomon’s plan to reduce Goldman’s reliance on volatile trading and investment banking revenues.

“We have been clear in our aspiration for Marcus to become the consumer banking platform of the future, and the acquisition of GreenSky advances this goal,” Solomon said in a statement.

Goldman Sachs’ acquisition of GreenSky is part of Goldman chief David Solomon’s plan to reduce Goldman’s reliance on volatile trading and investment banking revenues.
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Solomon has aimed to build businesses with predictable revenues such as consumer banking and mass-market wealth management, which most of Goldman Sach’s main rivals now have.

Reuters reported earlier this year that Goldman was considering acquisitions to build out Marcus after the Wall Street firm reported slow loan and deposit growth at the business last year in the wake of the COVID-19 pandemic.

GreenSky connects banks with customers seeking financing via an app.

The deal, which has been approved by the boards of both companies and includes a tax adjustment of $446 million, is expected to close in the fourth quarter of 2021 or first quarter next year.