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Goldman Sachs has entered into exclusive talks with a consortium of investment firms to sell its GreenSky business for about $500 million, about a quarter of what the Wall Street bank paid for the online lender in 2022.
The consortium consists of Sixth Street, Pimco, KKR and two smaller investors, people familiar with the matter said. Goldman Sachs plans to complete the sale when it releases third-quarter earnings on October 17, people familiar with the matter said.
People familiar with the matter warned that negotiations could still reach an impasse and the terms of the agreement could change. Goldman Sachs, Sixth Street, Pimco and KKR declined to comment. The Wall Street Journal earlier reported the talks.
A sale of GreenSky, which provides home improvement loans to customers, would mark another step in Chief Executive David Solomon’s plan to scale back Goldman’s ambitions in consumer banking.
Goldman Sachs announced in April that it was launching a sale process for the Atlanta-based bank. The bank agreed to acquire GreenSky for $2.2 billion in 2021, but completed the deal in March 2022 for $1.7 billion.
When Goldman Sachs agreed to the deal two years ago, it underscored the firm’s ambition to become a leader in consumer banking.
However, Goldman announced last October that it would scale back its retail banking plans amid investor unease with the strategy and years of heavy losses. In another deal reversal, Goldman Sachs agreed last month to sell the United Capital investment advisory business it acquired four years ago.
Alternative asset managers such as Apollo Global Management, Sixth Street and KKR have been aggressively expanding their credit and insurance-related investment businesses and starting to acquire debt issuance businesses to fuel the growth of their assets. Apollo has established or acquired more than a dozen lending businesses that originate loans for a range of products and services, including leasing equipment and aircraft leasing.
For Sixth Street, the potential GreenSky deal would allow it to directly originate a range of home improvement loans, which some credit investors favor because homeowners traditionally have higher credit scores.
Sixth Street has strong ties to Goldman Sachs. The firm was co-founded by several former Goldman Sachs executives, including Alan Waxman, David Stiepleman and Joshua Easterly. In recent years, it has hired senior executives who left Wall Street banks, including former CFO Marty Chavez and former asset management chief Julian Salisbury.
Additional reporting by Brooke Masters
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