|
|
Goldman Sachs has continued its buying spree by agreeing to pay $2.2 billion, or about $12 a share, for GreenSky Inc., which makes loans for major one-time purchases such as kitchen remodeling or medical procedures.
GreenSky works with big-box retailers, medical providers, and others to offer loans that it says are cheaper than credit card debt.
The purchase continues Goldman’s effort to expand from the rarified world of high finance, derive less of its income from advisory fees, and become more of a Main Street presence, The Wall Street Journal noted.
“Our goal is to build a real banking platform of the future,” Goldman CEO David Solomon said in a WSJ interview. “This moves us along in that journey.”
GreenSky became publicly traded in 2018 at a valuation of about $4.4 billion.
Missed payments began to add up and many of the banks the company needed to buy its loans lost interest.
The COVID War’s lockdown postponed many of the projects and procedures GreenSky would have financed, shrinking its business even further.
Goldman’s offer is 55 percent above GreenSky’s closing market valuation on 14 September.
GreenSky is a specialty company within the booming “buy-now-pay-later” (BNPL) market, in which lenders allow shoppers to spread the cost of major purchases over a few months, usually without interest and sometimes without a credit check.
Square paid $29 billion earlier this year to snatch Australian BNPL lender Afterpay; Paypal recently bought Japan’s Paidy for $2.7 billion.
Most BNPL companies operate as apps for online purchases but GreenSky markets its loans through brick-and-mortar providers, such as dentists’ offices and Home Depot stores.
The GreenSky deal is Goldman’s latest in a series of acquisitions.
Last month, Goldman paid about $1.9 billion to acquire NN Group, a Dutch investment management firm. Last October, the bank bought General Motors’ credit card business for an undisclosed amount.