David Zalik, founder and CEO of GreenSky.
Chris Hamilton | Green sky
Goldman Sachs is acquiring lender GreenSky for $ 2.24 billion as the investment bank continues to dig into consumer finance.
The all-stock deal for GreenSky, which is described as the largest fintech home loan platform in a press release announcing the transaction, is expected to close in the first quarter of 2022, the companies said on Wednesday. GreenSky stock rose 44% in pre-trading hours before stopping.
“Our aspiration for Marcus to become the consumer banking platform of the future was clear, and the acquisition of GreenSky moves forward with that goal,” said David Solomon, CEO of Goldman, in the press release. “GreenSky and his talented team have built an impressive, cloud-native platform that enables Marcus to reach a new and active group of dealers and customers.”
The move helps Goldman move forward in consumer finance, a great opportunity outside of its historic investment banking, trading, and wealth management space for the wealthy. Goldman started in retail banking with its Marcus credit brand five years ago and has since added automated investing and personal finance, as well as partnerships with Apple, Jetblue and Amazon.
The bank said the GreenSky deal will expand its customer base and give it access to the fintech network of more than 10,000 merchants.
Like its bigger competitors Affirm and Klarna, GreenSky bypasses credit cards for large ticket purchases with credits that are repaid over weeks or months. The “buy now, pay later” trend in fintech has recently become red hot. Affirm went public in January, Square bought Afterpay for $ 29 billion, and PayPal acquired a Japanese player for $ 2.7 billion last week.
The deal values GreenSky more than 50% above its last closing price, though it includes a tax-related adjustment of $ 446 million. GreenSky CEO David Zalik will join Goldman as a partner.
The fintech firm has been on Goldman’s radar for years: the bank was considering buying GreenSky in preliminary talks two years ago, according to the Wall Street Journal, which previously reported on the deal.
“We look forward to working with Goldman Sachs to continue to provide innovative payment solutions at the point of sale more quickly for our trading partners and their customers,” said Zalik in the press release.
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