Goldman Sachs is expected to experience a serious loss from their 2021 purchase of financial technology lender GreenSky, as per CNBC's information. Asset managers such as KKR, Apollo Global Management, Sixth Street Partners, Warburg Pincus and Synchrony Bank participated in the first round of offers, sources disclosed. One of the bidders reported, "All of the bids were very low, and Goldman's representatives are fervently upholding the value of the takeover."
Goldman Sachs is expected to take a significant loss on its 2021 purchase of fintech lender GreenSky, CNBC has learnt. According to sources familiar with the sale process, the bids for the installment loan business have been below what Goldman had anticipated. CEO David Solomon acquired Atlanta-based GreenSky for $2.24 billion in September 2021 to quicken the bank's advance into consumer finance. However, 18 months since the announcement of the deal, Solomon declared his intent to sell the business due to mounting losses and dysfunction in Goldman's consumer division, prompting a change of strategy. Reportedly, KKR, Apollo Global Management, Sixth Street Partners, Warburg Pincus and Synchrony Bank were some of the bidding parties in the initial stage of the sale which started in early June. One bidder stated, “Everybody's been coming in low, and the Goldman team keeps pushing back, pounding the table about the value of it.” Currently, Goldman Sachs is continuing negotiations with a handful of bidders in the hopes of receiving a higher price.
Goldman has been exploring various offers for its acquisition of GreenSky, including deals for the loan origination business and its existing loans, and an alternative for a single deal. Several bidders stated a valuation of roughly $300 million, while another stated closer to $500 million; a purchase near this price would be a substantial reduction from the $2.24 billion announced at the time of acquisition, which decreased to $1.7 billion by closing. Some bidders, KKR and Synchrony among them, declined to comment. Goldman President John Waldron expressed the potential of a write-down hitting the bank's results due to the GreenSky sale, and that the transaction could result in the loss of $500 million in goodwill. Tony Fratto commented in a statement that Goldman is happy with the level of bidder participation in the process.
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