Goldman Sachs Agrees to Sell Digital Lender GreenSky to Consortium, EPS Hit of -$0.19

Goldman Sachs (NYSE:GS) has finally agreed to sell digital lender GreenSky to a consortium led by Sixth Street. The purchasers include KKR, Bayview Asset Management, and CardWorks, with “significant support” from PIMCO through an asset acquisition, as well as strategic financing from CPP Investments.

Alan Waxman, co-Founder and CEO of Sixth Street, said that Sixth Street co-founder Michael Muscolino and Head of Asset Based Finance Michael Dryden will work to put GreenSky in a better position than Goldman could accomplish during its rather brief period of ownership.

Details of the transaction were not immediately available, but Goldman said that when the deal closes in Q1 2024, they will take a -$0.19 EPS hit. This is not the outcome that Goldman had initially hoped for.

David Solomon, Chairman and CEO of Goldman Sachs, issued the following statement on the sale:

“This transaction demonstrates our continued progress in narrowing the focus of our consumer business. While GreenSky is an attractive business, we are focused on advancing the strategy we laid out for our two core franchises. In Global Banking & Markets, we’ve improved our wallet share and are demonstrating strong growth in financing activities; and across our Asset & Wealth Management platform we are making very strong progress towards both our fundraising and management fee targets.”

To decipher the above, Goldman is continuing his ongoing retreat from Fintech, which started as a fast walk but now looks more like a sprint for the exits.

It was 2021 when Goldman announced the acquisition of GreenSky in an all-stock purchase valued, at the time, at around $2.24 billion. Goldman packaged the acquisition as part of their larger ambition of building the consumer banking platform of the future.

At that time, Solomon was more enthusiastic about Fintech, predicting that GreenSky would allow Marcus, Goldman’s digital banking brand, to reach a “new and active set of merchants and customers and provide them with an expanding set of solutions.”

At one point, Solomon thought that Fintech was the future of financial services and Goldman. Today, he has backed away from the vast ambitions of becoming the one digital financial platform to rule them all to providing some back-end bells and whistles. In the end, it was Goldman’s culture that was the undoing of its digital aspirations. Old finance got in the way of new finance, and a few tough quarters scared the Goldman Board of Directors and, with it, the security of Solomon’s leadership position. Live today to fight tomorrow, I guess.

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