Goldman Sachs is set to acquire the California-based United Capital Financial Partners Inc for up to $750 million.
According to the Wall Street Journal report, the acquisition is going to be one of the biggest deals for Goldman Sachs since the financial crisis. Additionally, it will help the firm to diversify its revenue stream by handling assets of its corporate clients. The acquisition could Goldman Sachs between $700 and $750 million. Goldman Sachs, as well as United Capital Financial Partner, refused to confirm the news or submit any comment regarding the matter.
United Capital is one of the most renowned investment advisory agencies in the United States. The firm has approximately 90 offices across the US and is known for having several independent financial advisers managing around $23 billion. Ever since the firm came into existence, it has put all the possible efforts to develop its retail customer base and deposits. Goldman Sachs has been trying its best to expand its revenue stream and reduce the overall wholesale funding cost. The deal is a clear indication that Goldman’s new CEO, David M. Solomon intends to reform the firm he took over in October.
Goldman moves to expand retail services
Goldman’s online retail bank, Marcus, has a balance of approximately $46 billion in client deposits in the US. According to the executives’ estimation, this figure is likely to increase by $10 billion every year. Some recent reports suggest Goldman Sachs is planning to introduce a corporate cash management addition by the end of this year. The bank itself is rumored to use the exclusive services of corporate cash management to handle its corporate transaction in an easier and effective way. According to the sources, using such services, Goldman can save up to $100 million annually.
Goldman is looking forward to buying United Capital Financial Partners as it could help the bank gain high net worth customers and better revenue, the type of wealth category that the bank, until recently, didn’t serve. While the Goldman Sachs’ Ayco arm performs its operations with corporate executives, its private wealth management department works with primarily high-net-worth. individuals. As per the current sources, Ayco has declared to diversify its online personal finance service in order to get the business of its commercial customer’s employees.
The news has had little impact on Goldman’s stock price.
