Sumary of GreenSky deal accelerates Goldman’s consumer banking ambitions:
- Goldman Sachs’s deal to buy the point-of-sale loan provider GreenSky fits neatly into a two-pronged strategy the New York bank has been pursuing this year.
- On one side, the deal would expand Goldman’s direct-to-consumer banking business, which the company had been steadily building since launching its consumer banking arm, Marcus, in 2016. On the other, it would allow Goldman to offer banking-as-a-service or embedded finance to more companies, in this case GreenSky’s network of 10,000 merchants.
- GreenSky was built as an intermediary between merchants — typically home-improvement contractors or health care providers — and lenders.
- The merchants offer point-of-sale loans to consumers that the banks quietly fund.
- The lenders, which pay loan servicing fees to GreenSky, acquire consumer loans without having to develop customer relationships themselves.
- Goldman agreed to buy GreenSky for $2.24 billion, or $12.11 per share;
- GreenSky first spoke publicly about the possibility of a sale after a disappointing earnings report in 2019. Shares in the Atlanta company, which debuted at $23 in 2018, traded at below $10 over the last two years until getting a boost from news of the Goldman Sachs deal.
- In midday trading Wednesday, GreenSky’s stock price was up 40% to $11.82.Some of the regional banks that partnered with GreenSky have more recently severed ties.