Gold­man Sachs ac­quires per­sonal fi­nance start-up

Viet Nam News - - MARKETS -

NEW YORK — Gold­man Sachs Group Inc bought Clar­ity Money, a per­sonal fi­nance startup, to bol­ster its Mar­cus on­line lend­ing busi­ness, it said yes­ter­day.

Buy­ing Clar­ity Money, a free app that helps con­sumers man­age their per­sonal fi­nances, is ex­pected to add over one mil­lion cus­tomers to the fi­nan­cial ser­vice firm’s Mar­cus busi­ness. Mar­cus of­fers tools to help cus­tomers save and bor­row. Clar­ity Money will be re-branded as Mar­cus by Gold­man Sachs over time, the com­pany said.

Terms were not dis­closed. Gold­man launched Mar­cus in Oc­to­ber 2016 as a way to court Main Street bor­row­ers sad­dled with credit card debt. It of­fers loans from US$3,500 to $40,000 and tar­gets credit card bor­row­ers who can ben­e­fit from con­sol­i­dat­ing debt into a sin­gle loan with a lower in­ter­est rate.

GS Bank, a sub­sidiary of Gold­man Sachs, is mak­ing the ac­qui­si­tion. Clar­ity Money CEO Adam Dell will join Gold­man Sachs as a part­ner. ZURICH — Swiss staffing com­pany Adecco Group is buy­ing US-based tech­nol­ogy ed­u­ca­tion provider Gen­eral Assem­bly for US$412.5 mil­lion in­clud­ing debt, it said yes­ter­day, adding heavy in­vest­ments in the busi­ness would ini­tially drag on earn­ings.

Gen­eral Assem­bly, whose founders in­clude Hy­att ho­tels heir Adam Pritzker, is a pri­vate school busi­ness started in 2011 that pro­vides train­ing in fields such as data sci­ence and anal­y­sis.

Its rev­enues in 2017 were about $100 mil­lion with a strong 2018 book­ing back­log, Adecco said in a state­ment. Adecco has gone into ac­qui­si­tion mode to kick­start growth and ad­dress its lag­ging per­for­mance com­pared with faster-grow­ing ri­vals, such as Rand­stad.

Adecco said it saw syn­er­gies be­tween Gen­eral Assem­bly and its own train­ing busi­ness, in par­tic­u­lar the Lee Hecht Har­ri­son ca­reer tran­si­tion busi­ness.

“Gen­eral Assem­bly is cur­rently in a high-growth in­vest­ment phase and is there­fore ex­pected to be mod­estly di­lu­tive to Group earn­ings in 2018, the im­pact of which is in­cluded within the group’s cur­rent guid­ance on planned strate­gic in­vest­ments,” Adecco said in a state­ment.

“From 2019, Gen­eral Assem­bly is ex­pected to be mod­estly ac­cre­tive to earn­ings,” it added.

“In the medium-term Gen­eral Assem­bly’s EBITA (core earn­ings) mar­gins are an­tic­i­pated to be sig­nif­i­cantly higher than the group av­er­age.”

Over the last three years, Adecco said Gen­eral Assem­bly’s rev­enue had grown at a com­pound an­nual rate of 30 per cent.

The to­tal en­ter­prise value (eq­uity plus debt) of the deal is $412.5 mil­lion, Adecco said, adding Gen­eral Assem­bly would con­tinue to op­er­ate as a sep­a­rate divi­sion under its Chief Ex­ec­u­tive Jake Schwartz, a co-founder.

An­a­lysts from Zuercher Kan­ton­al­bank (ZKB), who ear­lier this month down­graded their rat­ing on Adecco to “mar­ket weight”, said they were not ex­pect­ing a big mar­ket re­ac­tion to the deal. — REUTERS

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