Goldman Sachs Divests GreenSky Platform To Sixth Street-Led Consortium, Anticipates Earnings Impact In Q3

Goldman Sachs Group, Inc. GS plans to sell the GreenSky platform and associated loan assets to a consortium of institutional investors led by Sixth Street.

Goldman did not disclose the selling price. Goldman is poised to absorb an instant blow to its third-quarter earnings as a direct fallout from the GreenSky transaction.

The deal will result in a $(0.19) earnings per share impact on Goldman Sachs' Q3, which is expected next week.

The Consortium acquiring GreenSky is led by Sixth Street and consists of funds and accounts managed by KKR & Co. Inc. KKR, Bayview Asset Management, and CardWorks.

GreenSky, primarily a 'Buy Now, Pay Later' firm, focuses on home improvement loans. However, the sector has felt the pinch of escalating interest rates, as borrowers exhibit sensitivity towards assuming more costly loans, according to a news report by the New York Times. 

On the other hand, Goldman has essentially conceded its consumer banking business amid a collapse in the unit's profits, the report read. 

In fact, the company's executives had previously indicated the bank would almost certainly divest GreenSky, the New York Times said.

"While GreenSky is an attractive business, we are focused on advancing the strategy we laid out for our two core franchises," said David Solomon, Chairman and CEO of Goldman Sachs. 

Goldman Sachs will continue to operate the platform and record ongoing business results, including the impact of an agreement for the Consortium to purchase newly originated loans. 

"GreenSky accelerates business growth for its network of home improvement merchants by delivering innovative payment solutions at the point of sale, and we plan to continue the company's legacy of driving growth through enhanced technology and great user experiences," said Alan Waxman, Co-Founder and CEO of Sixth Street. 

Also Read: Goldman Sachs CEO David Solomon's Unyielding Approach: A Recipe For Success Or A Path To Dissent?

Price Action: GS shares are trading higher by 0.63% to $314.98 on the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.