According to reports, a large write-down will likely be taken by Goldman Sachs for its 2021 acquisition of fintech lender GreenSky after it attempts to unload the business. People familiar with the sale process say bids for the instalment loan business have fallen well short of Goldman’s expectations. Under CEO David Solomon, Goldman acquired Atlanta-based GreenSky for $2.24 billion to expand into consumer finance. Within 18 months of the bank’s September 2021 announcement, Solomon announced he was selling the business due to mounting losses and dysfunction in Goldman’s consumer division.
According to the people who declined to be identified, KKR, Apollo Global Management, Sixth Street Partners, Warburg Pincus and Synchrony Bank were among the asset managers and lenders involved in the first round of bids. “Everybody’s been coming in low, and the Goldman team keeps pushing back, pounding the table about the value of it,” said one of the bidders. According to the sources, the bank is continuing negotiations with a smaller group of bidders this week with the hope of ratcheting up the ultimate price. Goldman has been pursuing offers for GreenSky’s loan origination business and its book of existing loans separately, as well as offers for a single deal. One bidder said the origination platform was worth $300 million, while another said it was worth $500 million. If a deal closed near that valuation, it would represent a steep discount to what Goldman paid, forcing the company to disclose a write-down hitting its bottom line in an upcoming quarter. While the all-stock acquisition was announced with a $2.24 billion valuation, it was worth closer to $1.7 billion when the transaction closed six months later, according to one of the people with knowledge of the matter.
