As filed with the Securities and Exchange Commission on October 21, 2021

Registration No. 333-            

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

The Goldman Sachs Group, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

Delaware		6211		13-4019460
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(IRS Employer Identification No.)

 

 

200 West Street

New York, New York 10282

(212) 902-1000

(Address, including Zip Code, and Telephone Number, including Area Code, of Registrant’s Principal Executive Offices)

 

 

Thomas S. Riggs

The Goldman Sachs Group, Inc.

200 West Street

New York, New York 10282

Phone: (212) 902-1000

(Name, Address, including Zip Code, and Telephone Number, including Area Code, of Agent for Service)

 

 

 

		With copies to:
Brian E. Hamilton C. Andrew Gerlach Sullivan & Cromwell LLP 125 Broad Street New York, New York 10004 (212) 558-4000		Steven E. Fox GreenSky, Inc. 5565 Glenridge Connector, Suite 700 Atlanta, Georgia 30342 (678) 264-6105		Robert I. Townsend, III Daniel J. Cerqueira Cravath, Swaine & Moore LLP 825 8th Avenue New York, New York 10019 (212) 474-1000

 

 

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this Registration Statement becomes effective and all other conditions to the proposed mergers described in the enclosed proxy statement/prospectus have been satisfied or waived.

If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  ☐

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the “Securities Act”), check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer		☒		Accelerated filer		☐
Non-accelerated filer		☐		Smaller reporting company		☐
				Emerging growth company		☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)   ☐

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)   ☐

 

 

CALCULATION OF REGISTRATION FEE

 

Title of each class of securities to be registered		Amount to be registered		Proposed maximum offering price per share		Proposed maximum aggregate offering price		Amount of registration fee
Common stock, par value $0.01 per share		5,857,388(1)		N/A		$2,235,569,619.75(2)		$207,237.30(3)

(1)

Represents the estimated maximum number of shares of common stock, par value $0.01 per share, of the registrant (“GS Group common stock”) to be issued and registered upon completion of the mergers described in the proxy statement/prospectus contained herein (the “mergers”) with GreenSky, Inc. (“GreenSky”) and GreenSky Holdings, LLC (“GreenSky Holdings”). This number is based on the product of (a) the exchange ratio of 0.03 shares of GS Group common stock for each share of GreenSky Class A common stock, par value $0.01 per share (“GreenSky Class A common stock”) and each common unit of GreenSky Holdings multiplied by (b) 195,246,255, the sum of (i) an estimate of the maximum number of shares of GreenSky Class A common stock and (ii) an estimate of the maximum number of common units of GreenSky Holdings, in each case, issuable or expected to be exchanged (including in respect of equity awards of GreenSky and GreenSky Holdings) in connection with the mergers.

(2)

Pursuant to Rule 457 promulgated under the Securities Act and solely for the purpose of calculating the registration fee required by Section 6(b) of the Securities Act. The proposed aggregate maximum offering price was calculated as follows: the product of (i) $11.45 (the average of the high and low prices per share of GreenSky Class A common stock as reported on the NASDAQ Stock Market on October 14, 2021) multiplied by (ii) 195,246,255, the sum of the estimated maximum number of shares of GreenSky Class A common stock and the maximum number of common units of GreenSky Holdings that may be exchanged for the shares of GS Group common stock being registered (including in respect of equity awards of GreenSky and GreenSky Holdings).

(3)	Computed in accordance with Section 6(b) of the Securities Act at a rate equal to .0000927 multiplied by the proposed maximum aggregate offering price.

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with section 8(a) of the Securities Act, or until the Registration Statement shall become effective on such date as the SEC, acting pursuant to said section 8(a), may determine.

 

 

 

The information in the accompanying proxy statement/prospectus is not complete and may be changed. The GS Group common stock described below may not be issued until the registration statement filed with the Securities and Exchange Commission is effective. The accompanying proxy statement/prospectus is not an offer to sell these securities and does not constitute the solicitation of an offer to buy these securities in any jurisdiction where the offer or sale of these securities is not permitted.

PRELIMINARY—SUBJECT TO COMPLETION, DATED OCTOBER 21, 2021

 

MERGERS PROPOSED — YOUR VOTE IS VERY IMPORTANT

Dear Stockholders of GreenSky, Inc.:

As previously announced, on September 14, 2021, GreenSky, Inc., a Delaware corporation (“GreenSky”), entered into an Agreement and Plan of Merger (the “merger agreement”), with The Goldman Sachs Group, Inc., a Delaware corporation (“GS Group”), Goldman Sachs Bank USA, a bank organized under the laws of the State of New York (“GS Bank”), and GreenSky Holdings, LLC, a Georgia limited liability company and subsidiary of GreenSky (“GreenSky Holdings”). On [—], [—], a Delaware limited liability company and wholly owned subsidiary of GS Bank (“Merger Sub 1”), and [—], a Georgia limited liability company and wholly owned subsidiary of GS Bank (“Merger Sub 2”), became party to the merger agreement through the execution of a joinder agreement to the merger agreement. Upon the terms and subject to the conditions set forth in the merger agreement, (i) GreenSky will be merged with and into Merger Sub 1 (the “company merger”), with Merger Sub 1 surviving the company merger as a wholly owned subsidiary of GS Bank, and (ii) Merger Sub 2 will be merged with and into GreenSky Holdings (the “Holdings merger” and, together with the company merger, the “mergers”), with GreenSky Holdings surviving the Holdings merger as a subsidiary of GS Bank and Merger Sub 1 (“Surviving LLC 2”).

On the terms and subject to the conditions set forth in the merger agreement, at the effective time of the company merger (the “company merger effective time”), each share of Class A common stock, par value $0.01 per share, of GreenSky (“GreenSky Class A common stock”) issued and outstanding immediately prior to the company merger effective time, other than shares of GreenSky Class A common stock owned by GreenSky as treasury stock or owned by GS Group, GS Bank, Merger Sub 1 or Merger Sub 2, in each case, not on behalf of third parties (including in a fiduciary, custodial, nominee or similar capacity), will be converted into the right to receive 0.03 shares (the “exchange ratio”) of common stock, par value $0.01 per share, of GS Group (“GS Group common stock” and, such stock consideration, the “merger consideration”). As of the effective time of the Holdings merger (the “Holdings merger effective time” and together with the company merger effective time, the “effective time”), each share of Class B common stock, par value $0.001 per share, of GreenSky (“GreenSky Class B common stock” and, together with the GreenSky Class A common stock, the “GreenSky common stock”) shall be automatically deemed transferred to GreenSky, canceled and cease to exist for no consideration. As of the Holdings merger effective time, each common unit of GreenSky Holdings (“Common Units”) will be converted into the right to receive the merger consideration, other than Common Units that are owned by GreenSky, which shall be converted into an equal number of limited liability company interests in Surviving LLC 2.

GreenSky common stock is traded on the NASDAQ Global Select Market (“NASDAQ”) under the ticker symbol “GSKY” and GS Group common stock is traded on the New York Stock Exchange (“NYSE”) under the ticker symbol “GS”. Based on the closing price of GS Group common stock on the NYSE of $403.69 on September 14, 2021, the last full trading day before the date of the public announcement of the mergers, the exchange ratio represented approximately $12.11 in implied value for each share of GreenSky Class A common stock and each Common Unit. Based on the closing price of GS Group common stock on the NYSE of $[—] on [—], the last practicable date before the date of the accompanying proxy statement/prospectus, the

exchange ratio represented approximately $[—] in implied value for each share of GreenSky Class A common stock and each Common Unit. Although the number of shares of GS Group common stock that you will receive in connection with the mergers is fixed, the market value of the merger consideration will fluctuate with changes in the market price of GS Group common stock and may be more or less than, or the same as, the merger consideration on the date of the accompanying proxy statement/prospectus or at the time that you vote. We urge you to obtain current market quotations for shares of GS Group common stock and GreenSky Class A common stock.

Based upon the number of outstanding shares of GreenSky Class A common stock, the number of outstanding Common Units and the number of outstanding GreenSky equity awards, other than options, in each case, as of [—], if the mergers are completed, we anticipate that GS Group will issue approximately [—] shares of GS Group common stock in connection with the mergers. Based upon the number of shares of GreenSky Class A common stock, the number of Common Units, the number of GreenSky equity awards, other than options, and the number of shares of GS Group common stock, in each case, outstanding on [—], we expect that, immediately after the consummation of the mergers, the former holders of GreenSky Class A common stock, Common Units and GreenSky equity awards immediately prior to the consummation of the mergers (ignoring any shares of GS Group common stock they may already own) would own approximately [—]%, and the holders of GS Group common stock immediately prior to the consummation of the mergers would own approximately [—]%, of the outstanding GS Group common stock. The number of shares of GS Group common stock that will be issued in the mergers will depend on, among other factors, the number of shares of GreenSky Class A common stock, Common Units and GreenSky equity awards outstanding immediately prior to the effective time.

GreenSky will hold a special meeting of its stockholders online via live webcast on [—], (including any adjournment or postponement thereof, the “special meeting”) in connection with the mergers and the other transactions contemplated by the merger agreement (collectively, the “transaction”). The special meeting can be accessed by visiting [—], where you will be able to participate in the meeting live and vote online. We encourage you to allow ample time for online check-in, which will open at [—], Eastern Time. Please note that because there will not be a physical meeting location, you will not be able to attend the special meeting in person.

At the special meeting, GreenSky stockholders will be asked to consider and vote on (i) a proposal to adopt the merger agreement and the transaction (the “GreenSky merger proposal”), (ii) a proposal to approve, by advisory (non-binding) vote, the compensation that may be paid or become payable to the named executive officers of GreenSky in connection with the consummation of the mergers (the “non-binding compensation proposal”) and (iii) a proposal to approve the adjournment of the special meeting from time to time, if necessary or appropriate, to solicit additional proxies in favor of the GreenSky merger proposal if there are insufficient votes at the time of such adjournment to approve the GreenSky merger proposal (the “adjournment proposal”).

Your vote is very important, regardless of the number of shares you own. The record date for determining the GreenSky stockholders entitled to receive notice of, and to vote at, the special meeting is the close of business on [—]. The transaction cannot be completed unless the holders of a majority of the voting power of the shares of GreenSky common stock outstanding as of the close of business on [—], vote in favor of the GreenSky merger proposal at the special meeting. The obligations of GreenSky and GS Group to complete the transaction are subject to the satisfaction or waiver (if permissible under applicable law) of certain conditions set forth in the merger agreement. More information about GreenSky, GS Group, GS Bank, Merger Sub 1, Merger Sub 2, the special meeting, the merger agreement and the transaction, including the mergers, is included in the accompanying proxy statement/prospectus.

IT IS IMPORTANT THAT YOU VOTE YOUR SHARES OF GREENSKY COMMON STOCK PROMPTLY. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE FOLLOW THE INSTRUCTIONS ON THE PROXY CARD TO VOTE BY TELEPHONE OR INTERNET AS PROMPTLY AS POSSIBLE, OR PROMPTLY COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE PRE-ADDRESSED POSTAGE-PAID ENVELOPE. IF YOUR SHARES ARE HELD IN THE NAME OF A BANK, BROKER OR OTHER NOMINEE, PLEASE FOLLOW THE VOTING INSTRUCTIONS PROVIDED BY SUCH BANK, BROKER OR OTHER NOMINEE.

Your proxy is being solicited by the board of directors of GreenSky (the “GreenSky board”). After careful consideration, the GreenSky board, acting upon the unanimous recommendation of a special committee composed of independent directors of the GreenSky board (the “GreenSky special committee”), (i) determined that it was in the best interests of GreenSky and its stockholders and declared it advisable that GreenSky enter into the merger agreement and other related agreements and consummate the transactions contemplated thereby, (ii) approved and adopted the merger agreement and other related agreements, (iii) resolved to recommend that GreenSky stockholders vote for the adoption of the merger agreement and (iv) directed that the merger agreement and the transactions contemplated thereby be submitted to GreenSky stockholders for adoption. The GreenSky board recommends that you vote “FOR” the GreenSky merger proposal, which approval is necessary to complete the transaction, “FOR” the non-binding compensation proposal, and “FOR” the adjournment proposal. The GreenSky board and the GreenSky special committee made their respective determinations after evaluating the transaction in consultation with GreenSky’s senior management and their respective legal and financial advisors and considering a number of factors. See the section entitled “GreenSky’s Reasons for the Mergers; Recommendation of the GreenSky Board of Directors” beginning on page 67 of the accompanying proxy statement/prospectus for a more detailed description of the factors considered by the GreenSky board and the GreenSky special committee.

We urge you to read carefully the risks that are described in the “Risk Factors” section, beginning on page 30 of the accompanying proxy statement/prospectus. In addition, in considering the recommendation of the GreenSky board, you should be aware that the directors and executive officers of GreenSky have certain interests in the transaction that may be different from, or in addition to, the interests of GreenSky stockholders generally. See the section entitled “GreenSky Stockholder Proposals—Proposal 2: Non-Binding Compensation Proposal” beginning on page 138 of the accompanying proxy statement/prospectus and “The Mergers—Interests of GreenSky’s Directors and Executive Officers in the Mergers” beginning on page 94 of the accompanying proxy statement/prospectus for a more detailed description of these interests.

The accompanying proxy statement/prospectus provides you with detailed information about the transaction, and we urge you to read carefully in its entirety the accompanying proxy statement/prospectus, including the Annexes and documents incorporated by reference.

On behalf of the GreenSky board, thank you for your consideration and continued support. We look forward to the successful consummation of the transaction.

Sincerely,

David Zalik

Chairman and Chief Executive Officer

GreenSky, Inc.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES TO BE ISSUED UNDER THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS OR DETERMINED THAT THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The accompanying proxy statement/prospectus is dated [—], and is first being mailed to GreenSky stockholders on or about [—].

GreenSky, Inc.

5565 Glrenridge Connector, Suite 700

Atlanta, Georgia 30342

(678) 264-6105

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

To Be Held On [—]

Dear Stockholders of GreenSky, Inc.:

We are pleased to invite you to attend a special meeting of stockholders of GreenSky, Inc., a Delaware corporation (“GreenSky”). The meeting will be held in a virtual meeting format only, online via live webcast on [—] beginning at [—] a.m., Eastern Time (including any adjournment or postponement thereof, the “special meeting”), to consider and vote upon the matters listed below. The special meeting can be accessed by visiting [—], where you will be able to participate in the meeting live and vote online. We encourage you to allow ample time for online check-in, which will open at [—], Eastern Time. Please note that because there will not be a physical meeting location, you will not be able to attend the special meeting in person.

As previously announced, on September 14, 2021, GreenSky entered into an Agreement and Plan of Merger (the “merger agreement”), with The Goldman Sachs Group, Inc., a Delaware corporation (“GS Group”), Goldman Sachs Bank USA, a bank organized under the laws of the State of New York (“GS Bank”) and GreenSky Holdings, LLC, a Georgia limited liability company and subsidiary of GreenSky (“GreenSky Holdings”). On [—], [—], a Delaware limited liability company and wholly owned subsidiary of GS Bank (“Merger Sub 1”), and [—], a Georgia limited liability company and wholly owned subsidiary of GS Bank (“Merger Sub 2”), became party to the merger agreement through the execution of a joinder agreement to the merger agreement. Upon the terms and subject to the conditions of the merger agreement, (i) GreenSky will be merged with and into Merger Sub 1 (the “company merger”), with Merger Sub 1 surviving the company merger as a wholly owned subsidiary of GS Bank, and (ii) Merger Sub 2 will be merged with and into GreenSky Holdings (the “Holdings merger” and, together with the company merger, the “mergers”), with GreenSky Holdings surviving the Holdings merger as a subsidiary of GS Bank and Merger Sub 1.

The special meeting will be held for the following purposes:

 

•

to consider and vote on a proposal to adopt the merger agreement and the transactions contemplated thereby (the “GreenSky merger proposal”);

 

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to consider and vote on a proposal to approve, by advisory (non-binding) vote, the compensation that may be paid or become payable to the named executive officers of GreenSky in connection with the consummation of the mergers (the “non-binding compensation proposal”); and

 

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to consider and vote on a proposal to approve the adjournment of the special meeting from time to time, if necessary or appropriate, to solicit additional proxies in favor of the GreenSky merger proposal if there are insufficient votes at the time of such adjournment to approve such proposal (the “adjournment proposal”).

The approval by holders of GreenSky’s Class A common stock, par value $0.01 per share (“GreenSky Class A common stock”), and Class B common stock, par value $0.001 per share (“GreenSky Class B common stock” and, together with GreenSky Class A common stock, “GreenSky common stock”) of the GreenSky merger proposal is a condition to closing under the merger agreement, as such GreenSky stockholders must adopt the merger agreement and the transactions contemplated thereby (collectively, the “transaction”) in order for the transaction to occur.

Because the vote on the non-binding compensation proposal is only advisory in nature, it will not be binding on GreenSky or the board of directors of GreenSky (the “GreenSky board”). Accordingly, because GreenSky is contractually obligated to pay the compensation, such compensation will be paid or become payable, subject only to the conditions applicable thereto, if the transaction is consummated and regardless of the outcome of the non-binding compensation proposal.

Please refer to the accompanying proxy statement/prospectus for further information with respect to the business to be transacted at the special meeting.

Holders of record of GreenSky common stock, at the close of business on [—] are entitled to notice of, and to vote on, all proposals at the special meeting and any adjournments or postponements of the special meeting.

To be approved, the GreenSky merger proposal requires the affirmative vote of the holders of a majority of the voting power of the outstanding shares of GreenSky common stock entitled to vote thereon. To be approved, the non-binding compensation proposal requires the affirmative vote of the holders of a majority of the votes cast by the GreenSky stockholders entitled to vote on the proposal who are present in person (including virtually) or represented by proxy at the special meeting. To be approved, the adjournment proposal requires the affirmative vote of the holders of a majority of the votes entitled to be cast by the GreenSky stockholders who are present in person (including virtually) or by proxy at the special meeting, whether or not a quorum is present. If a quorum is not present, the chairman of the special meeting or a majority of the votes entitled to be cast by GreenSky stockholders present in person or by proxy at the special meeting may adjourn the meeting.

David Zalik, Chairman and Chief Executive Officer of GreenSky, and certain of his affiliates (the “subject stockholders”) own GreenSky common stock having the right to vote, as of September 30, 2021, approximately 56% of the total voting power of the shares of GreenSky common stock issued and outstanding as of the close of business on [—]. Concurrently with the execution of the merger agreement, the subject stockholders entered into a voting agreement with GS Group and GS Bank, pursuant to which, among other things, each subject stockholder agreed to vote all of their shares in favor of the GreenSky merger proposal or, if the GreenSky board effects an adverse change in recommendation in accordance with the merger agreement, a portion of their shares of GreenSky common stock in favor of the GreenSky merger proposal. Unless the GreenSky board effects an adverse change in recommendation in accordance with the merger agreement, the aggregate votes committed to by the subject stockholders in favor of the GreenSky merger proposal will constitute the approval of the GreenSky merger proposal by the requisite majority of the voting power of the shares of GreenSky common stock outstanding as of the close of business on [—].

Your proxy is being solicited by the GreenSky board. After careful consideration, the GreenSky board, acting upon the unanimous recommendation of a special committee composed of independent directors of the GreenSky board (the “GreenSky special committee”), (i) determined that it was in the best interests of GreenSky and its stockholders and declared it advisable that GreenSky enter into the merger agreement and other related agreements and consummate the transactions contemplated thereby, (ii) approved and adopted the merger agreement and other related agreements, (iii) resolved to recommend that GreenSky stockholders vote for the adoption of the merger agreement and (iv) directed that the merger agreement and the transactions contemplated thereby be submitted to GreenSky stockholders for adoption. The GreenSky board recommends that you vote “FOR” the GreenSky merger proposal, which approval is necessary to complete the transaction, “FOR” the non-binding compensation proposal, and “FOR” the adjournment proposal. The GreenSky board and the GreenSky special committee made their respective determinations after evaluating the transaction in consultation with GreenSky’s senior management and their respective legal and financial advisors and considering a number of factors. See the section entitled “GreenSky’s Reasons for the Mergers; Recommendation of the GreenSky Board of Directors” beginning on page 67 of the accompanying proxy statement/prospectus for a more detailed description of the factors considered by the GreenSky board and the GreenSky special committee.

We urge you to read carefully the risks that are described in the “Risk Factors” section, beginning on page 30 of the accompanying proxy statement/prospectus. In considering the recommendation of the GreenSky board, you should be aware that the directors and executive officers of GreenSky have certain interests in the transaction that may be different from, or in addition to, the interests of GreenSky stockholders generally. See the sections entitled “GreenSky Stockholder Proposals—Proposal 2: Non-Binding (Advisory) Compensation Proposal” beginning on page 137 of the accompanying proxy statement/prospectus and “The Mergers—Interests of GreenSky Directors and Executive Officers in the Mergers” beginning on page 94 of the accompanying proxy statement/prospectus for a more detailed description of these interests.

IT IS IMPORTANT THAT YOU VOTE YOUR SHARES OF GREENSKY COMMON STOCK PROMPTLY. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE FOLLOW THE INSTRUCTIONS ON THE PROXY CARD TO VOTE BY TELEPHONE OR INTERNET AS PROMPTLY AS POSSIBLE, OR PROMPTLY COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE PRE-ADDRESSED POSTAGE-PAID ENVELOPE. IF YOUR SHARES ARE HELD IN THE NAME OF A BANK, BROKER, TRUSTEE OR OTHER NOMINEE, PLEASE FOLLOW THE VOTING INSTRUCTIONS PROVIDED BY SUCH BANK, BROKER OR OTHER NOMINEE.

By Order of the Board of Directors,

Steven E. Fox

Executive Vice President,

Chief Legal Officer and Corporate Secretary

GreenSky, Inc.

[—]

Atlanta, Georgia

REFERENCES TO ADDITIONAL INFORMATION

This proxy statement/prospectus incorporates important business and financial information about The Goldman Sachs Group, Inc. (“GS Group”) and GreenSky, Inc. (“GreenSky”) from other documents that GS Group and GreenSky have filed with the U.S. Securities and Exchange Commission, which we refer to as the “SEC,” and that are contained in or incorporated by reference into this proxy statement/prospectus. For a listing of documents incorporated by reference into this proxy statement/prospectus, please see the section entitled “Where You Can Find More Information” beginning on page 163 of this proxy statement/prospectus. This information is available for you to review through the SEC’s website at www.sec.gov.

You may request copies of this proxy statement/prospectus and any of the documents incorporated by reference into this proxy statement/prospectus or other information concerning GS Group, without charge, by telephone or written request directed to:

Attention: Investor Relations

The Goldman Sachs Group, Inc.

200 West Street

New York, New York 10282

(212) 902-1000

gs-investor-relations@gs.com

You may also request a copy of this proxy statement/prospectus and any of the documents incorporated by reference into this proxy statement/prospectus or other information concerning GreenSky, without charge, by telephone or written request directed to:

Attention: Investor Relations

GreenSky, Inc.

5565 Glenridge Connector, Suite 700

Atlanta, Georgia 30342

(470) 284-7017

investors@greensky.com

In order for you to receive timely delivery of the documents in advance of the special meeting of GreenSky stockholders to be held on [—], your request for such information must be received no later than [—].

You may obtain copies of documents filed by GS Group with the SEC free of charge on GS Group’s investor relations website at goldmansachs.com/investor-relations/. You may also obtain copies of documents filed by GreenSky free of charge on GreenSky’s investor relations website at investors.greensky.com.

 

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ABOUT THIS PROXY STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form S-4 filed with the SEC by GS Group (File No. 333-[    ]), constitutes a prospectus of GS Group under Section 5 of the Securities Act of 1933, as amended, which we refer to as the “Securities Act,” with respect to the shares of common stock, par value $0.01 per share, of GS Group, which we refer to as “GS Group common stock,” to be issued to GreenSky stockholders and holders of Common Units pursuant to the merger agreement. This document also constitutes a proxy statement of GreenSky under Section 14(a) of the Securities Exchange Act of 1934, as amended, which we refer to as the “Exchange Act.” It also constitutes a notice of meeting with respect to the special meeting, at which GreenSky stockholders will be asked to consider and vote upon the approval and adoption of the merger agreement.

GS Group has supplied all information contained or incorporated by reference into this proxy statement/prospectus relating to GS Group, and GreenSky has supplied all information contained or incorporated by reference into this proxy statement/prospectus relating to GreenSky.

You should rely only on the information contained in or incorporated by reference into this proxy statement/prospectus. GS Group and GreenSky have not authorized anyone to provide you with information that is different from or in addition to that contained in or incorporated by reference into this proxy statement/prospectus. This proxy statement/prospectus is dated [—] and you should not assume that the information contained in this proxy statement/prospectus is accurate as of any date other than such date. Further, you should not assume that the information incorporated by reference into this proxy statement/prospectus is accurate as of any date other than the date of the incorporated document. Neither the mailing of this proxy statement/prospectus to GreenSky stockholders nor the issuance by GS Group of shares of GS Group common stock pursuant to the merger agreement will create any implication to the contrary.

Unless otherwise indicated or as the context otherwise requires, all references in this proxy statement/prospectus to:

 

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“bank partners” refers to the financial institutions that participate in the GreenSky program in order to originate consumer loans for customers of merchants

 

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“closing date” refers to the date of the closing of the transactions contemplated by the merger agreement

 

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“Code” refers to the Internal Revenue Code of 1986, as amended

 

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“Common Unit” refers to a common unit of GreenSky Holdings

 

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“company merger effective time” means the effective time of the company merger

 

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“DGCL” refers to the General Corporation Law of the State of Delaware

 

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“effective time” refers to the effective time of the mergers

 

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“Exchange Act” refers to the Securities Exchange Act of 1934, as amended

 

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“exchange ratio” refers to 0.03 shares of GS Group common stock per share of GreenSky Class A common stock or Common Unit, as applicable

 

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“GAAP” refers to accounting principles generally accepted in the United States

 

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“GLLCA” refers to the Georgia Limited Liability Company Act

 

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“GreenSky” refers to GreenSky, Inc.

 

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“GreenSky board” refers to the Board of Directors of GreenSky

 

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“GreenSky bylaws” refers to the Amended and Restated Bylaws of GreenSky, dated January 31, 2019

 

 

-ii-

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“GreenSky charter” refers to the Amended and Restated Certificate of Incorporation of GreenSky, dated May 22, 2018

 

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“GreenSky Class A common stock” refers to the Class A common stock, par value $0.01 per share, of GreenSky

 

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“GreenSky Class B common stock” refers to the Class B common stock, par value $0.001 per share, of GreenSky

 

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“GreenSky Holdings” refers to GreenSky Holdings, LLC

 

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“GreenSky Holdings operating agreement” refers to the Second Amended and Restated Operating Agreement of GreenSky Holdings, dated May 23, 2018, as amended

 

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“GreenSky program” refers to the consumer lending program administered by GreenSky and its subsidiaries, on behalf of and at the direction, and under the control, of bank partners, pursuant to which such bank partners make consumer loans to customers of merchants to finance their purchases of goods or services from such merchants

 

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“GreenSky special committee” refers to the special committee composed of independent directors of the GreenSky board

 

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“GreenSky stockholder” or “GreenSky stockholders” refers to one or more holders of GreenSky Class A common stock or GreenSky Class B common stock, as applicable

 

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“GS Bank” refers to Goldman Sachs Bank USA

 

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“GS Group” refers to The Goldman Sachs Group, Inc.

 

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“GS Group board” refers to the Board of Directors of GS Group

 

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“GS Group by-laws” refers to the Amended and Restated By-Laws of GS Group, dated February 18, 2016

 

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“GS Group charter” refers to the Restated Certificate of Incorporation of GS Group, dated July 30, 2021

 

•

“Holdings merger effective time” means the effective time of the Holdings merger

 

•

“HSR Act” refers to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended

 

•

“IRS” refers to the Internal Revenue Service

 

•

“J.P. Morgan” refers to J.P. Morgan Securities LLC

 

•

“merchants” refers to the manufacturers, dealers, merchants, providers, distributors, retailers, contractors or installers of goods or services that participate in the GreenSky program

 

•

“merger agreement” refers to the Agreement and Plan of Merger, dated as of September 14, 2021, by and among, GS Group, GS Bank, GreenSky and GreenSky Holdings (as amended or otherwise modified from time to time, including by the joinder agreement, dated as of [—], by and among Merger Sub 1, Merger Sub 2, and the parties to the merger agreement)

 

•

“Merger Sub 1” refers to [—], a Delaware limited liability company and a wholly owned subsidiary of GS Bank

 

•

“Merger Sub 2” refers to [—], a Georgia limited liability company and a wholly owned subsidiary of GS Bank

 

•

“mergers” refers to, collectively, the merger of GreenSky with and into Merger Sub 1, with Merger Sub 1 being the surviving entity (which transaction is referred to as the “company merger”), and the merger of Merger Sub 2 with and into GreenSky Holdings, with GreenSky Holdings being the surviving entity (which transaction is referred to as the “Holdings merger”)

 

 

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•

“merger consideration value” refers to the product of the exchange ratio and the closing price on the NYSE for a share of GS Group common stock on the last trading day immediately preceding the closing date of the mergers

 

•

“NASDAQ” refers to the NASDAQ Global Select Market

 

•

“NYSE” refers to the New York Stock Exchange

 

•

“Piper Sandler” refers to Piper Sandler & Co.

 

•

“record date” refers to the close of business on [—]

 

•

“SEC” refers to the Securities and Exchange Commission

 

•

“Securities Act” refers to the Securities Act of 1933, as amended

 

-iv-

TABLE OF CONTENTS

 

		Page
QUESTIONS AND ANSWERS ABOUT THE MERGERS AND THE SPECIAL MEETING			1
SUMMARY			15
The Parties			15
The Mergers			16
Treatment of GreenSky Equity Awards			17
GreenSky’s Reasons for the Mergers; Recommendation of the GreenSky Board of Directors			17
Opinion of J.P. Morgan, GreenSky’s Financial Advisor			18
Opinion of Piper Sandler, GreenSky Special Committee’s Financial Advisor			18
Interests of GreenSky Directors and Executive Officers in the Merger			19
Holdback Agreement			19
Voting Agreement			19
Backstop Loan Participation Purchase Facility Commitment Letter			19
Tax Receivable Agreement Amendment			20
Regulatory Approvals			20
Accounting Treatment			20
No Appraisal or Dissenters’ Rights			20
Solicitation; Change in Recommendation			21
Conditions to the Mergers			22
Termination of the Merger Agreement			23
Termination Fee			23
Delisting and Deregistration of GreenSky Class A Common Stock			24
NYSE Market Listing			24
Closing and Effective Time of the Mergers			24
Material United States Federal Income Tax Consequences			24
Information About the GreenSky Special Meeting			25
Comparison of Equityholder Rights			26
Risk Factors			26
COMPARATIVE MARKET PRICE DATA			27
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS			28
RISK FACTORS			30
Risks Relating to the Mergers			30
Risks Relating to GS Group’s Business			38
Risks Relating to GreenSky’s Business			38

 

-v-

		Page
THE PARTIES TO THE MERGERS			39
The Goldman Sachs Group, Inc.			39
Goldman Sachs Bank USA			39
GreenSky, Inc.			39
GreenSky Holdings, LLC			40
THE MERGERS			41
Background of the Transactions			41
GS Group’s Reasons for the Mergers			65
GreenSky’s Reasons for the Mergers; Recommendation of the GreenSky Board of Directors			67
Certain Unaudited Financial Information			73
Opinion of J.P. Morgan, GreenSky’s Financial Advisor			76
Opinion of Piper Sandler, GreenSky Special Committee’s Financial Advisor			82
Transaction Structure			92
Merger Consideration			93
Closing and Effective Time of the Mergers			93
Treatment of GreenSky Equity Awards			93
Interests of GreenSky’s Directors and Executive Officers in the Mergers			94
Holdback Agreement			99
Voting Agreement			99
Backstop Loan Participation Purchase Facility Commitment Letter			99
Tax Receivable Agreement Amendment			100
Regulatory Approvals			100
Accounting Treatment			100
No Appraisal or Dissenters’ Rights			100
Delisting and Deregistration of GreenSky Class A Common Stock			100
NYSE Market Listing			100
THE MERGER AGREEMENT			101
Explanatory Note Regarding the Merger Agreement			101
The Mergers; Closing; Effective Time; Organizational Documents; Managers and Officers			101
Effect of the Mergers on Equity Interests			102
Exchange Matters			103
Treatment of GreenSky Equity Awards			105
Representations and Warranties			106
Conduct of Business			109

 

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		Page
Solicitation; Change in Recommendation			112
The Special Meeting			115
Efforts; Regulatory Matters			115
Indemnification and Insurance			117
Employee Matters			119
Certain Tax Matters			120
Certain Additional Covenants			120
Conditions to the Mergers			120
Termination of the Merger Agreement			121
Termination Fee			122
Effect of Termination			122
Amendment			122
Extension of Time			123
Fees and Expenses			123
Governing Law			123
Specific Enforcement			123
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES			124
Tax Consequences of the Company Merger			125
Tax Consequences of the Holdings Merger			126
Ownership of GS Group Common Stock Received in the Mergers			127
Backup Withholding and Information Reporting			128
INFORMATION ABOUT THE GREENSKY SPECIAL MEETING			129
Date, Time and Place			129
Purpose of the Special Meeting			129
Recommendation of the GreenSky Board of Directors			129
Record Date; Outstanding Shares; Shares Entitled to Vote			130
Quorum, Abstentions and Broker Non-Votes			131
Vote Required			131
Voting by GreenSky Directors, Executive Officers and Principal Securityholders			132
Voting by Proxy or in Person			133
Revocability of Proxies and Changes to a GreenSky Stockholder’s Vote			134
Adjournments and Postponements			134
Anticipated Date of Completion of the Transaction			135
Solicitation of Proxies; Payment of Solicitation Expenses			135

 

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		Page
Questions and Additional Information			135
GREENSKY STOCKHOLDER PROPOSALS			136
Proposal 1: GreenSky Merger Proposal			136
Proposal 2: Non-Binding (Advisory) Compensation Proposal			137
Proposal 3: Adjournment Proposal			138
CERTAIN OTHER MATTERS			139
COMPARISON OF EQUITYHOLDER RIGHTS			140
CERTAIN BENEFICIAL OWNERS OF GREENSKY COMMON STOCK			155
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			158
LEGAL OPINIONS			159
HOUSEHOLDING OF PROXY MATERIALS			160
DEADLINES FOR SUBMITTING STOCKHOLDER PROPOSALS			161
WHERE YOU CAN FIND MORE INFORMATION			163
ANNEX A: Agreement and Plan of Merger			A-1
ANNEX B: Opinion of J.P. Morgan Securities LLC			B-1
ANNEX C: Opinion of Piper Sandler & Co.			C-1

 

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QUESTIONS AND ANSWERS ABOUT THE MERGERS AND THE SPECIAL MEETING

The following questions and answers are intended to briefly address some commonly asked questions regarding the mergers, the merger agreement and the GreenSky special meeting. We urge you to read carefully the remainder of this document because the information in this section may not provide all the information that might be important to you in determining how to vote. Additional important information is also contained in the annexes to, and the documents incorporated by reference in, this proxy statement/prospectus. See “Where You Can Find More Information” beginning on page 163 of this proxy statement/prospectus.

 

Q:	Why am I receiving this proxy statement/prospectus and proxy card?

 

A:

GreenSky has agreed to be acquired by GS Group pursuant to the terms and subject to the conditions of the merger agreement that is described in this proxy statement/prospectus. In connection with the mergers, GreenSky will merge with and into Merger Sub 1, a new wholly owned subsidiary of GS Bank, with Merger Sub 1 being the surviving entity and Merger Sub 2, a new wholly owned subsidiary of GS Bank, will merge with and into GreenSky Holdings, with GreenSky Holdings being the surviving entity. In order for the mergers and the other transactions contemplated by the merger agreement to be completed, among other things, GreenSky stockholders need to vote to adopt the merger agreement. GreenSky is holding the special meeting to ask its stockholders to consider and vote upon, among other things, a proposal to adopt the merger agreement (which we refer to as the “GreenSky merger proposal”).

This proxy statement/prospectus includes important information about the mergers, the merger agreement, a copy of which is attached as Annex A to this proxy statement/prospectus, and the special meeting. GreenSky stockholders should read this information carefully and in its entirety. The enclosed voting materials allow GreenSky stockholders to vote their shares without attending the special meeting. GreenSky stockholders who hold their shares through a bank, broker or other nominee in “street name” must follow the voting instructions provided by their bank, broker or other nominee in order to vote their shares.

The vote of each GreenSky stockholder is important. GreenSky encourages each GreenSky stockholder to vote as soon as possible.

 

Q:	Why is GreenSky proposing the mergers?

 

A:

The GreenSky board carefully reviewed and considered the terms and conditions of the merger agreement, including the mergers and the other transactions contemplated thereby. The GreenSky board, acting on the unanimous recommendation of the GreenSky special committee, (i) determined that it was in the best interests of GreenSky and its stockholders and declared it advisable that GreenSky enter into the merger agreement and other related agreements and consummate the transactions contemplated thereby, (ii) approved and adopted the merger agreement and other related agreements, (iii) resolved to recommend that GreenSky stockholders vote for the adoption of the merger agreement and (iv) directed that the merger agreement and the transactions contemplated thereby be submitted to GreenSky stockholders for adoption. For more information regarding key factors the GreenSky board considered in determining to recommend the adoption of the merger agreement by GreenSky stockholders, see the section entitled “The Mergers—GreenSky’s Reasons for the Mergers; Recommendation of the GreenSky Board of Directors” beginning on page 67 of this proxy statement/prospectus.

 

Q:	What am I being asked to vote on at the special meeting?

 

A:	At the special meeting, GreenSky stockholders will be asked to consider and vote on the following proposals:

1. Proposal 1. The GreenSky merger proposal, pursuant to which GreenSky stockholders are being asked to adopt the merger agreement;

2. Proposal 2. The non-binding compensation proposal, pursuant to which GreenSky stockholders are being asked to approve, by advisory (nonbinding) vote (which we refer to as the “non-binding compensation

 

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proposal”), the compensation that may be paid or become payable to the named executive officers of GreenSky in connection with the consummation of the mergers (which we refer to as the “transaction-related compensation”); and

3. Proposal 3. The adjournment proposal, pursuant to which GreenSky stockholders are being asked to approve the adjournment of the special meeting from time to time, if necessary or appropriate, to solicit additional proxies in favor of the GreenSky merger proposal if there are insufficient votes at the time of such adjournment to approve such proposal (which we refer to as the “adjournment proposal”).

The approval of the GreenSky merger proposal is a condition to closing under the merger agreement, as GreenSky stockholders must adopt the merger agreement in order for the mergers to occur. If GreenSky stockholders fail to approve the GreenSky merger proposal, the mergers will not occur. The approval of the non-binding compensation proposal and the adjournment proposal are not conditions to the completion of the mergers.

 

Q:	What is the vote required to approve each proposal at the special meeting?

 

A:	Proposal 1: GreenSky Merger Proposal. The GreenSky merger proposal requires the affirmative vote of the holders of a majority of the voting power of the outstanding shares of GreenSky common stock entitled to vote thereon.

Proposal 2: Non-Binding Compensation Proposal. The non-binding compensation proposal requires the affirmative vote of the holders of a majority of the votes cast by the GreenSky stockholders entitled to vote on the proposal who are present in person or represented by proxy.

Proposal 3: Adjournment Proposal. The adjournment proposal requires the affirmative vote of the holders of a majority of the votes entitled to be cast by the GreenSky stockholders who are present in person or by proxy, whether or not a quorum is present.

The approval of the GreenSky merger proposal is a condition to closing under the merger agreement, as GreenSky stockholders must adopt the merger agreement in order for the mergers to occur. If GreenSky stockholders fail to approve the GreenSky merger proposal, the mergers will not occur.

On September 14, 2021, concurrently with the execution of the merger agreement and as a condition to GS Group’s and GS Bank’s entry into the merger agreement, David Zalik, chairman of the GreenSky board and GreenSky’s Chief Executive Officer, and certain of his affiliates, who, as of September 30, 2021, collectively and in the aggregate held voting power over approximately 56% of the outstanding GreenSky common stock, entered into a voting agreement with GS Group and GS Bank, pursuant to which they have agreed, among other things, to vote their shares of GreenSky common stock in favor of the approval of the merger agreement and the transaction contemplated thereby at the special meeting, with certain exceptions (as further described in the section entitled “The Mergers—Voting Agreement” beginning on page 99 of this proxy statement/prospectus). As a result, and subject to the terms of the voting agreement and certain exceptions therein, the approval of the GreenSky merger proposal is effectively assured. Furthermore, at the close of business on the record date, approximately [—]% of the issued and outstanding shares of GreenSky Class A common stock and [—]% of the issued and outstanding shares of GreenSky Class B common stock, collectively accounting for approximately [—]% of the total voting power of GreenSky common stock, was directly held by GreenSky’s directors and executive officers, other than Mr. Zalik. For additional information regarding the ownership of GreenSky common stock by GreenSky’s directors, executive officers and certain stockholders, see the section entitled “Certain Beneficial Owners of GreenSky Common Stock”, beginning on page 155 of this proxy statement/prospectus.

The approval of the non-binding compensation proposal and the adjournment proposal are not conditions to the completion of the mergers. The vote on each proposal is a vote separate and apart from the other proposals. Accordingly, GreenSky stockholders may vote in favor of one or more of the proposals and vote not to approve the other proposal(s).

 

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Q:	Who will count the votes?

 

A:	The votes at the special meeting will be counted by an inspector of elections appointed by the chairman of the meeting.

 

Q:	How does the GreenSky board recommend that I vote at the special meeting?

 

A:	The GreenSky board, acting on the unanimous recommendation of the GreenSky special committee, recommends that holders of GreenSky common stock vote (i) “FOR” the GreenSky merger proposal, (ii) “FOR” the non-binding compensation proposal and (iii) “FOR” the adjournment proposal.

For a discussion of the factors that the GreenSky board considered in determining to recommend the adoption of the merger agreement, please see the section entitled “The Mergers—GreenSky’s Reasons for the Mergers; Recommendation of the GreenSky Board of Directors” beginning on page 67 of this proxy statement/prospectus. In addition, in considering the recommendation of the GreenSky board with respect to the merger agreement, you should be aware that some of GreenSky’s directors and executive officers have interests that may be different from, or in addition to, the interests of the GreenSky stockholders generally. Please see the section of this proxy statement/prospectus entitled “The Mergers—Interests of GreenSky’s Directors and Executive Officers in the Mergers” beginning on page 94 of this proxy statement/prospectus.

 

Q:	What will I receive if the mergers are completed?

 

A:

If the mergers are completed, each (i) share of GreenSky Class A common stock issued and outstanding immediately prior to the company merger, except for shares of GreenSky Class A common stock owned by GreenSky as treasury shares or held by GS Group, GS Bank, Merger Sub 1 or Merger Sub 2 (in each case, not held on behalf of third parties, including in a fiduciary, custodial, nominee or similar capacity) and (ii) Common Unit issued and outstanding immediately prior to the Holdings merger, except for Common Units owned by GreenSky, will, in each case, automatically be canceled and cease to exist and each holder shall cease to have any rights with respect thereto, except for the right to receive 0.03 shares of GS Group common stock, which we refer to as the “merger consideration,” cash in lieu of fractional shares of GS Group common stock, if any, and any unpaid dividends or other distributions. See “What happens if I am eligible to receive a fraction of a share of GS Group common stock as part of the merger consideration?” below and the sections entitled “The Mergers—Merger Consideration” and “The Merger Agreement—Effect of the Mergers on Equity Interests—Fractional Shares” beginning on pages 93 and 102, respectively, of this proxy statement/prospectus for further details.

Pursuant to the GreenSky charter, each share of GreenSky Class B common stock will be automatically deemed transferred to GreenSky at such time that GreenSky Class B common stock ceases to be held by a holder of a corresponding number of Common Units. Since, at the effective time of the Holdings merger, all Common Units will be canceled and no share of GreenSky Class B common stock will be held by holders of Common Units, all GreenSky Class B common stock will be automatically deemed transferred to GreenSky, canceled and cease to exist at the Holdings merger effective time. Accordingly, no consideration will be payable in respect of any share of GreenSky Class B common stock.

If, after the date of the merger agreement and prior to the effective time, the outstanding shares of GreenSky Class A common stock or Common Units are changed into a different number of shares, units or a different class or there is a change in the number of issued and outstanding shares of GS Group common stock, in each case, by reason of the occurrence or record date of any stock or unit split, reverse share or unit split, dividend or distribution (including any dividend or other distribution of securities convertible into shares of GreenSky Class A common stock, Common Units or GS Group common stock), reorganization, recapitalization, reclassification, combination, exchange of shares or units or other like change, the merger consideration will be appropriately adjusted to reflect such change.

 

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Q:	What is the exchange ratio?

 

A:

The exchange ratio is used to determine the number of shares of GS Group common stock that holders of GreenSky Class A common stock and Common Units, as applicable, will be entitled to receive for each share of GreenSky Class A common stock or Common Unit, respectively, they hold. The exchange ratio is 0.03, as set forth in the merger agreement.

 

Q:	What is the value of the merger consideration?

 

A:

Although the number of shares of GS Group common stock that GreenSky stockholders will receive in the mergers is fixed, the market value of the merger consideration will fluctuate with changes in the market price of GS Group common stock and may be more or less than, or the same as, the implied value of the merger consideration on the date of this proxy statement/prospectus or the price of GS Group common stock at the time of the special meeting. Based on the closing stock price of GS Group common stock on the NYSE on September 14, 2021, the last full trading day before the date of the public announcement of the mergers, of $403.69, and the exchange ratio of 0.03, the merger consideration value would be $12.11 for each share of GreenSky Class A common stock and each Common Unit, as of September 14, 2021. Based on the closing stock price of GS Group common stock on the NYSE on [—], the latest practicable date before the date of this proxy statement/prospectus, of $[—], and the exchange ratio of 0.03, the merger consideration value would be $[—] for each share of GreenSky Class A common stock and each Common Unit, as of such date. We urge you to obtain current market quotations for shares of GS Group common stock and GreenSky Class A common stock.

 

Q:	What happens if the market price of shares of GS Group common stock or GreenSky Class A common stock changes before the closing of the mergers?

 

A:

No change will be made to the exchange ratio of 0.03 if the market price of shares of GS Group common stock or GreenSky Class A common stock changes before the effective time. Because the exchange ratio is fixed (other than in specified circumstances described below), the value of the merger consideration to be received by GreenSky stockholders and holders of Common Units in the mergers based on the market price of shares of GS Group common stock will depend on such market price at the effective time. If the price of GS Group common stock declines between the date the merger agreement was signed and the date of the special meeting and the consummation of the mergers, holders of GreenSky Class A common stock and holders of Common Units will receive shares of GS Group common stock that have a market value upon the consummation of the mergers that is less than the market value of such shares calculated pursuant to the exchange ratio on the date the merger agreement was signed or on the date of the special meeting, respectively.

For more information, see the section entitled “Risk Factors—Risks Relating to the Mergers—Because the exchange ratio is fixed and the market price of GS Group common stock has fluctuated and will continue to fluctuate, holders of GreenSky Class A common stock and holders of Common Units cannot be certain, at the time they vote to approve the mergers, of the market value of the merger consideration they will receive in the mergers” beginning on page 30 of this proxy statement/prospectus.

 

Q:	What respective equity stakes will current GreenSky and GS Group stockholders hold in GS Group immediately following the mergers?

 

A:

Based on the number of shares of GreenSky Class A common stock and GS Group common stock outstanding on [—], the latest practicable date prior to the date of this proxy statement/prospectus, upon consummation of the mergers, former holders of GreenSky Class A common stock are expected to own approximately [—]% of the outstanding shares of GS Group common stock and GS Group stockholders immediately prior to consummation of the mergers are expected to own approximately [—]% of the outstanding shares of GS Group common stock. The relative ownership interests of current GS Group stockholders and former GreenSky stockholders in GS Group immediately following the consummation of the mergers will depend on the number of shares of GS Group common stock and GreenSky common stock issued and outstanding immediately prior to the consummation of the mergers.

 

-4-

Q:	What happens if I am eligible to receive a fraction of a share of GS Group common stock as part of the merger consideration?

 

A:

If the aggregate number of shares of GS Group common stock that you are entitled to receive as part of the merger consideration includes a fraction of a share of GS Group common stock, you will receive a cash payment, without interest, in lieu of that fractional share, with the value based on the volume weighted average price per share of GS Group common stock on the NYSE on the trading day immediately preceding the closing date for five trading days ending on the first business day immediately prior to the closing date. No holder of record of GreenSky Class A common stock or Common Units receiving a cash payment in lieu of fractional shares of GS Group common stock will be entitled to any dividends, voting rights or other rights in respect of any fractional share of GS Group common stock. See the section entitled “The Merger Agreement—Effect of the Mergers on Equity Interests—Fractional Shares” beginning on page 103 of this proxy statement/prospectus for further details.

 

Q:	What will holders of GreenSky equity awards receive in the mergers?

 

A:

Stock Options. At the effective time, subject to the terms and conditions of the merger agreement, each option to purchase shares of GreenSky common stock (each, a “GreenSky stock option”) that is outstanding as of immediately prior to the effective time, whether vested or unvested, will be canceled and the holder thereof shall become entitled to receive a lump-sum cash payment, without interest, equal to the product of (i) the number of shares of GreenSky common stock subject to such GreenSky stock option immediately prior to the effective time and (ii) the excess, if any, of (x) the merger consideration value (or, if such GreenSky stock option is subject to a cap on the value received upon exercise of such option, the amount of such cap, if less than the merger consideration value) over (y) the per share exercise price of such GreenSky stock option, net of any withholding taxes. Any GreenSky stock option with a per share exercise price that is equal to or greater than the merger consideration value will be canceled for no consideration.

Restricted Shares Granted Prior to September 14, 2021. At the effective time, subject to the terms and conditions of the merger agreement, each share of GreenSky common stock subject to forfeiture conditions (each, a “GreenSky restricted share”) granted prior to September 14, 2021 (other than those covered by an agreement between GS Group and the applicable holder pursuant to which the holder has agreed to different treatment) that is outstanding immediately prior to the effective time will vest in full as of immediately prior to the effective time and will be treated the same as other shares of GreenSky common stock.

Restricted Shares Granted On or Subsequent to September 14, 2021. At the effective time, subject to the terms and conditions of the merger agreement, each GreenSky restricted share granted on or following September 14, 2021 that is outstanding as of immediately prior to the effective time will be canceled and substituted with shares of GS Group common stock subject to forfeiture conditions (each, a “GS Group restricted share”) (rounded up to the nearest whole share), generally on the same vesting terms as the canceled GreenSky restricted share, with the number of shares equal to the product of (i) the number of shares of GreenSky common stock covered by such GreenSky restricted share as of immediately prior to the effective time and (ii) the exchange ratio.

Restricted Units. At the effective time, subject to the terms and conditions of the merger agreement, each Common Unit subject to forfeiture conditions (each, a “GreenSky restricted unit”) that is outstanding immediately prior to the effective time will vest in full as of immediately prior to the effective time and will be treated the same as other Common Units.

The GreenSky stock options, GreenSky restricted shares and GreenSky restricted units are collectively referred to as the “GreenSky equity awards.”

See “The Mergers—Treatment of GreenSky Equity Awards” beginning on page 93 of this proxy statement/prospectus for further details.

 

-5-

Q:	What will happen to GreenSky as a result of the company merger?

 

A:

If the mergers are consummated, GreenSky will be merged with and into Merger Sub 1, with Merger Sub 1 surviving the company merger. Following the effective time, the surviving company will be a wholly owned subsidiary of GS Bank and an indirect subsidiary of GS Group. As a result of the company merger, GreenSky will no longer be a publicly held company and its separate corporate existence will cease. Following the company merger, GreenSky Class A common stock will be delisted from the NASDAQ and deregistered under the Exchange Act.

 

Q:	When do you expect the mergers to be consummated?

 

A:

Subject to the satisfaction or waiver of the closing conditions described under the section entitled, “The Merger Agreement—Conditions to the Mergers” beginning on page 120 of this proxy statement/prospectus, including the adoption of the merger agreement by GreenSky stockholders at the special meeting, GS Group and GreenSky expect that the mergers will be consummated in the fourth quarter of 2021 or the first quarter of 2022. However, it is possible that factors outside the control of both companies, including whether or when the required regulatory approvals for the transactions will be received, could result in the mergers being consummated at a different time or not at all.

 

Q:	What are the material United States federal income tax consequences of the mergers to holders of GreenSky Class A common stock and holders of Common Units?

 

A:

As further described below in the section entitled “Material United States Federal Income Tax Consequences”, it is the opinion of Cravath, Swaine & Moore LLP and Sullivan & Cromwell LLP that the company merger should qualify as a tax-free “reorganization” within the meaning of Section 368(a) of the Code. Accordingly, the exchange of GreenSky Class A common stock for shares of GS Group common stock should be tax-free to U.S. holders (as defined below under the section entitled “Material United States Federal Income Tax Consequences”), except with respect to any cash received in lieu of fractional shares of GS Group common stock.

The exchange of Common Units for shares of GS Group common stock (and cash in lieu of fractional shares of GS Group common stock, if any) in the Holdings merger will be a taxable sale of a U.S. holder’s Common Units in exchange for shares of GS Group common stock (and any cash received in lieu of fractional shares of GS Group common stock). A U.S. holder of Common Units who receives GS Group common stock (and cash in lieu of fractional shares of GS Group common stock, if any) in exchange for Common Units pursuant to the Holdings merger will recognize gain or loss in an amount equal to the difference between (a) the sum of (X) the fair market value of the GS Group common stock received, (Y) any cash received (including any cash in lieu of fractional shares of GS Group common stock) and (Z) such U.S. holder’s share of Holdings’ liabilities immediately prior to the Holdings merger and (b) such U.S. holder’s adjusted tax basis in the Common Units exchanged therefor (which will include such U.S. holder’s share of Holdings’ liabilities immediately prior to the Holdings merger).

You should read the section entitled “Material United States Federal Income Tax Consequences” beginning on page 124 of this proxy statement/prospectus for a more complete discussion of the material United States federal income tax consequences of the mergers.

The United States federal income tax consequences described above may not apply to all holders of GreenSky Class A common stock or holders of Common Units. Your tax consequences will depend on your individual situation. Accordingly, we strongly urge you to consult your tax advisor for a full understanding of the particular tax consequences of the mergers to you.

 

Q:	Who can vote at the special meeting?

 

A:	All holders of record of GreenSky common stock as of the close of business on [—], the record date, are entitled to vote at the special meeting.

 

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Q:	When and where is the special meeting?

 

A:

The special meeting will be held on [—], at [—], Eastern Time and will be conducted completely online via the internet. GreenSky stockholders may attend and participate in the special meeting by visiting [—], which we refer to as the “special meeting website.” There will be no physical location for the special meeting. To access the special meeting, you will need the 16-digit control number included on your proxy card or voting instruction form.

We encourage you to access the special meeting before the start time of [—], Eastern Time. Please allow ample time for online check-in, which will begin at [—], Eastern Time.

GreenSky stockholders who participate in the special meeting by way of the special meeting website will be considered to have attended the special meeting “in person,” as such term is used in this proxy statement/prospectus, including for purposes of determining a quorum and counting votes.

By conducting the special meeting completely online via the internet, GreenSky is eliminating many of the costs associated with a physical meeting. In addition, GreenSky believes that a virtual meeting will provide greater access to those GreenSky stockholders who want to attend, will improve our ability to communicate more effectively with GreenSky’s stockholders during the special meeting, and will eliminate the health risks associated with an in-person meeting in light of the ongoing COVID-19 pandemic.

 

Q:	How may I access the special meeting website?

 

A:

The special meeting can be accessed by visiting [—]. We encourage you to allow ample time for online check-in, which will open at [—], Eastern Time. GreenSky stockholders of record as of the record date will need the 16-digit control number found on their proxy card in order to access the special meeting website. GreenSky stockholders who hold their shares through a bank, broker, trustee or other nominee in “street name” will need the 16-digit control number found on the voting instruction form provided by their bank, broker, trustee or other nominee in order to attend and vote at the special meeting via the special meeting website.

 

Q:	If I am a holder of shares of GreenSky Class A common stock or Common Units, how will I receive the merger consideration to which I am entitled?

 

A:

Holders of book-entry shares of GreenSky Class A common stock and holders of Common Units, in each case, as of the effective time, will not be required to take any action to receive the merger consideration. Holders of book-entry shares and Common Units not held through the Depository Trust Company, which we refer to as “DTC”, will receive from the exchange agent, which will be a bank or trust company designated by GS Group and reasonably acceptable to GreenSky and which we refer to as the “exchange agent”, a statement reflecting the number of whole shares of GS Group common stock issued to such holder and a check in the amount of any cash in lieu of fractional shares and any unpaid dividends such holder is entitled to, as well as appropriate materials advising the holder of completion of the mergers, as promptly as reasonably practicable after the effective time. With respect to book-entry shares of GreenSky Class A common stock or Common Units held through DTC, GS Group, GreenSky and GreenSky Holdings will cooperate to establish procedures with the exchange agent and DTC to ensure that the exchange agent will transmit to DTC or its nominees as soon as reasonably practicable after the effective time, upon surrender of such book-entry shares or Common Units held of record by DTC or its nominees in accordance with DTC’s customary surrender procedures, the merger consideration, any cash in lieu of fractional shares and any unpaid non-stock dividends and any other dividends or other distributions, in each case, to be issued or paid pursuant to the merger agreement.

As promptly as practicable after the effective time, the exchange agent will mail to each holder of a certificate which immediately prior to the effective time represented a share of GreenSky Class A common stock, a letter of transmittal and instructions relating to the surrender of such holder’s certificate(s) and receipt of the merger consideration. After receiving the proper documentation from the holder of a certificate, the exchange agent will forward to such holder or such holder’s bank, brokerage firm, trustee or

 

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other nominee the GS Group common stock and cash to which such holder is entitled. More information on the exchange procedures may be found under the caption “The Merger Agreement—Exchange Matters” beginning on page 103 of this proxy statement/prospectus.

 

Q:	Will my shares of GS Group common stock received in connection with the mergers be entitled to receive a dividend?

 

A:	After the effective time, as a holder of GS Group common stock, you will receive the same dividends on shares of GS Group common stock that all other holders of shares of GS Group common stock will receive with any dividend record date that occurs after the effective time.

 

Q:	Why am I being asked to consider and vote on a proposal to approve, on an advisory (non-binding) basis, certain compensation arrangements for GreenSky’s named executive officers in connection with the mergers?

 

A:	Under SEC rules, GreenSky is required to seek an advisory (non-binding) vote with respect to the transaction-related compensation.

 

Q:	What will happen if GreenSky stockholders do not approve the transaction-related compensation of GreenSky’s named executive officers?

 

A:

Approval of the transaction-related compensation is not a condition to the consummation of the mergers. The vote is an advisory vote and, as such, the results will not be binding on GreenSky or the GreenSky board. Such compensation will be paid or become payable if the mergers are consummated, subject only to the conditions applicable thereto.

 

Q:	Do any of GreenSky’s directors or executive officers have interests in the mergers that may differ from those of GreenSky stockholders?

 

A:

GreenSky directors and executive officers may have interests in the mergers that may be different from, or in addition to, those of GreenSky stockholders generally. The members of the GreenSky board and the members of the GreenSky special committee were aware of and considered these interests in reaching the determination, in the case of the GreenSky special committee, to recommend the mergers to the GreenSky board and, in the case of the GreenSky board, to approve and adopt the merger agreement and other related agreements and recommend to the GreenSky stockholders that they vote in favor of the GreenSky merger proposal. For additional information, see, “The Mergers—Interests of GreenSky’s Directors and Executive Officers in the Mergers” beginning on page 94 of this proxy statement/prospectus.

 

Q:	What is the difference between holding shares as a GreenSky stockholder of record and as a beneficial owner?

 

A:	Some GreenSky stockholders hold their shares through a bank, broker, trustee or other nominee rather than directly in their own name. As summarized below, there are certain distinctions between shares held of record and those shares owned beneficially.

Stockholder of Record. If your shares are registered directly in your name with our transfer agent, Continental Stock Transfer & Trust Company, then you are considered, with respect to those shares, the “stockholder of record.” As the stockholder of record, you have the right to grant your voting proxy directly to us or to a third party or to vote virtually via the special meeting website at the special meeting.

Beneficial Owner. If your shares are held in a bank or brokerage account, by a trustee or by another nominee, then you are considered the “beneficial owner” of those shares. As the beneficial owner of those shares, you have the right to direct your bank, broker, trustee or nominee how to vote, and you also are invited to attend the special meeting. However, because a beneficial owner is not the stockholder of record, you may not vote these shares in person at the special meeting unless you obtain a “legal proxy” from the

bank, broker, trustee or nominee that holds your shares, giving you the right to vote virtually via the special meeting website at the special meeting.

 

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If you are not a stockholder of record, please understand that GreenSky does not know that you are a GreenSky stockholder or how many shares you own.

 

Q:	If my shares of GreenSky common stock are held in “street name” by my bank, brokerage firm, trustee or other nominee, will my bank, brokerage firm, trustee or other nominee automatically vote those shares for me?

 

A:

If your GreenSky common stock is held in “street name” in a stock brokerage account or by a bank, broker, trustee or other nominee, you must provide the record holder of your GreenSky common stock with instructions on how to vote your shares. Please follow the voting instructions provided by your bank, broker, trustee or other nominee. Please note that you may not vote GreenSky common stock held in street name by returning a proxy card directly to GreenSky or by voting in person at the special meeting unless you provide a “legal proxy”, which you must obtain from your bank, broker, trustee or other nominee. Your bank, broker, trustee or other nominee is obligated to provide you with a voting instruction form for you to use.

Brokers who hold shares in street name for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, brokers are not allowed to exercise their voting discretion with respect to the approval of matters that are “non-routine” without specific instructions from the beneficial owner. “Broker non-votes” occur when shares held in street name are present at the special meeting but the broker or nominee is not instructed by the beneficial owner of shares to vote on a particular proposal for which the broker does not have discretionary voting power. Under applicable rules, each of the proposals to be voted on at the special meeting will be “non-routine” and therefore, it is expected that there will be no broker non-votes at the special meeting.

If you are a GreenSky stockholder and you do not instruct your bank, broker, trustee or other nominee on how to vote your shares:

 

•

your bank, broker, trustee or other nominee may not vote your shares on the GreenSky merger proposal, which will have the same effect as a vote “AGAINST” this proposal;

 

•

your bank, broker, trustee or other nominee may not vote your shares on the non-binding compensation proposal or the adjournment proposal, which will have no effect on the vote count of either of these proposals; and

 

•

your shares will not be counted towards determining whether a quorum is present.

 

Q:	How many votes do I have?

 

A:

On each matter properly brought before the special meeting, each holder of GreenSky Class A common stock is entitled to one vote per share of GreenSky Class A common stock and each holder of GreenSky Class B common stock is entitled to ten votes per share of GreenSky Class B common stock, in each case, held of record as of the record date. As of close of business on the record date, there were [—] shares of GreenSky common stock outstanding, consisting of [—] shares of GreenSky Class A common stock and [—] shares of GreenSky Class B common stock.

 

Q:	What constitutes a quorum for the special meeting?

 

A:

The presence, in person or represented by proxy, of the holders of a majority of the votes entitled to be cast by the GreenSky stockholders entitled to vote at the special meeting, constitutes a quorum for the purposes of the special meeting. Shares of GreenSky common stock represented at the special meeting by attendance via the special meeting website that are entitled to vote at the special meeting, have not previously voted and are not voted at the special meeting (which we refer to as “attending non-votes”) or shares for which a GreenSky stockholder directs an “abstention” from voting, will each be counted for purposes of determining a quorum. A broker non-vote will not be counted towards determining whether a quorum is present. GreenSky does not expect there to be any broker non-votes at the special meeting.

 

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Q:	What do I need to do now?

 

A:	Carefully read and consider the information contained in and incorporated by reference into this proxy statement/prospectus, including its annexes.

IT IS IMPORTANT THAT YOU VOTE YOUR SHARES OF GREENSKY COMMON STOCK PROMPTLY. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE FOLLOW THE INSTRUCTIONS ON THE PROXY CARD TO VOTE BY TELEPHONE OR INTERNET AS PROMPTLY AS POSSIBLE, OR PROMPTLY COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE PRE-ADDRESSED POSTAGE-PAID ENVELOPE. IF YOUR SHARES ARE HELD IN THE NAME OF A BANK, BROKER, TRUSTEE OR OTHER NOMINEE, PLEASE FOLLOW THE VOTING INSTRUCTIONS PROVIDED BY SUCH BANK, BROKER, TRUSTEE OR OTHER NOMINEE.

 

Q:	How do I vote?

 

A:	Stockholder of Record. A stockholder of record may vote (i) live online at the special meeting via the special meeting website, (ii) by proxy using a proxy card, (iii) by proxy over the telephone or (iv) by proxy via the internet.

Whether or not you plan to attend the special meeting via the special meeting website, we urge you to vote by proxy to ensure your vote is counted. You may still attend the special meeting and vote at the special meeting via the special meeting website, even if you have already voted by proxy. The vote you cast at the special meeting via the special meeting website will supersede any previous votes that you may have submitted.

 

•

By Mail: To vote using the proxy card, simply complete, sign and date the proxy card and return it promptly in the envelope provided. If you return your signed proxy card to us before the special meeting, we will vote your shares as you direct.

 

•

Via the Internet: To vote via the internet, go to www.proxyvote.com and follow the on-screen instructions. To be counted, your internet vote must be received by 11:59 p.m., Eastern Time, on [—] (for shares of GreenSky Class A common stock in the GreenSky 2018 Omnibus Incentive Compensation Plan, the voting deadline is 11:59 p.m., Eastern Time, on [—]).

 

•

By Telephone: To vote by telephone, dial toll-free 1-800-690-6903 using a touch-tone phone and follow the recorded instructions. To be counted, your telephone vote must be received by 11:59 p.m., Eastern Time, on [—]. (For shares of GreenSky Class A common stock in the GreenSky 2018 Omnibus Incentive Compensation Plan, the voting deadline is 11:59 p.m., Eastern Time, on [—]).

 

•

Virtually at the Special Meeting: To vote virtually during the special meeting, attend and vote via the special meeting website.

Beneficial Owner. If you are a beneficial owner of shares registered in the name of your bank, broker, trustee or other nominee, then you should have received a notice containing voting instructions from that organization rather than from GreenSky. Simply follow the voting instructions in that notice to ensure that your vote is counted. To vote virtually during the special meeting via the special meeting website, you must obtain a valid proxy from your bank, broker, trustee or other nominee. Follow the instructions included with these proxy materials or contact your bank, broker, trustee or other nominee to request a proxy form.

 

Q:	How can I change or revoke my vote?

 

A:

Any GreenSky stockholder of record who has given a proxy may revoke it at any time prior to its exercise at the special meeting by (i) giving written notice of revocation to GreenSky’s Corporate Secretary, (ii) properly submitting a later proxy via the internet or by telephone, (iii) properly submitting a duly executed proxy bearing a later date or (iv) voting his or her shares at the special meeting via the special meeting website.

 

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If you are the beneficial owner of shares held through a bank, broker, trustee or other nominee, then you must follow the specific instructions provided to you by your bank, broker, trustee or other nominee to change or revoke any instructions you have already given to your bank, broker, trustee or other nominee.

Attendance at the special meeting, in and of itself, will not constitute a revocation of a proxy.

 

Q:	If a GreenSky stockholder gives a proxy, how are the shares of GreenSky common stock voted?

 

A:	If you provide specific voting instructions, then your shares will be voted as instructed.

If you hold shares as the stockholder of record and properly submit a proxy without giving specific voting instructions, then your shares will be voted in accordance with the recommendations of the GreenSky board. The GreenSky board, acting on the unanimous recommendation of the GreenSky special committee, recommends that holders of GreenSky common stock vote (i) “FOR” the GreenSky merger proposal, (ii) “FOR” the non-binding compensation proposal and (iii) “FOR” the adjournment proposal.

You may have granted to your bank, broker, trustee or other nominee discretionary voting authority over your account. Your bank, broker, trustee or other nominee may be able to vote your shares depending on the terms of the agreement you have with your bank, broker, trustee or other nominee.

The persons identified on the proxy card attached to this proxy statement/prospectus as having the authority to vote the proxies also will have discretionary authority to vote, to the extent permitted by applicable law, on such other business as may properly come before the special meeting and any postponement or adjournment thereof. The GreenSky board is not aware of any other matters that are likely to be brought before the special meeting. If any other matter is properly presented for action at the special meeting, the persons identified on the proxy card attached to this proxy statement/prospectus as having the authority to vote the proxies will vote on such matter in their own discretion

 

Q:	What will happen if a GreenSky stockholder does not vote on the GreenSky merger proposal, non-binding compensation proposal or the adjournment proposal?

 

A:	The outcome depends on how the GreenSky common stock is held and whether any vote is cast or not:

Stockholders of Record.

 

•

If a GreenSky stockholder submits a proxy to GreenSky but the proxy does not indicate how it should be voted on the proposals, the proxy will be counted as a vote “FOR” each of the proposals.

 

•

If a GreenSky stockholder submits a proxy to GreenSky and the proxy indicates that the GreenSky stockholder abstains from voting as to the non-binding compensation proposal, it will count towards the required quorum but will have no effect on the vote count of the proposal.

 

•

If a GreenSky stockholder submits a proxy to GreenSky and the proxy indicates that the GreenSky stockholder abstains from voting as to the GreenSky merger proposal or the adjournment proposal, it will have the same effect as a vote “AGAINST” the proposals.

 

•

If a GreenSky stockholder fails to submit a proxy to GreenSky and does not attend the special meeting (a “complete failure to vote”), that GreenSky stockholder’s shares will not count towards the required quorum of a majority of the votes entitled to be cast on the proposals. Such a complete failure to vote will have the same effect as a vote “AGAINST” the GreenSky merger proposal, but will have no effect on the non-binding compensation proposal or the adjournment proposal.

 

•

An attending non-vote will have the same effect as a vote “AGAINST” the GreenSky merger proposal and the adjournment proposal, but will have no effect on the non-binding compensation proposal, assuming a quorum is present.

Beneficial Owner.

 

•

If a GreenSky stockholder holds shares of GreenSky common stock in “street name”, the shares will not be represented and will not be voted on any matter unless the GreenSky stockholder

 

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affirmatively instructs the bank, broker, trustee or other nominee how to vote the shares in accordance with the voting instructions provided by the bank, broker or other nominee. Banks, brokers, trustees or other nominees will not be able to vote on any of the proposals at the special meeting unless they have received voting instructions from the beneficial owners. A broker non-vote will not be counted towards determining whether a quorum is present. Broker non-votes will have the same effect as a vote “AGAINST” the GreenSky merger proposal. Broker non-votes will have no effect on the vote count of the non-binding compensation proposal, assuming a quorum is present. Broker non-votes will have no effect on the vote count of the adjournment proposal, whether or not a quorum is present. GreenSky does not expect there to be any broker non-votes at the special meeting.

 

Q:	What should I do if I receive more than one set of voting materials?

 

A:

If you hold shares of GreenSky common stock in “street name” and also directly in your name as a stockholder of record or otherwise, or if you hold shares of GreenSky common stock in more than one brokerage account, you may receive more than one set of voting materials relating to the special meeting.

Stockholders of Record. For shares held directly, please complete, sign, date and return each proxy card (or cast your vote by telephone or via the internet as provided on each proxy card) or otherwise follow the voting instructions provided in this proxy statement/prospectus in order to ensure that all of your shares of GreenSky common stock held directly by you are voted.

Beneficial Owner. For shares held in “street name” through a bank, broker, trustee or other nominee, you should follow the procedures provided by your bank, broker, trustee or other nominee to make sure that you vote all of your shares held in “street name.”

 

Q:	What happens if I sell my shares of GreenSky common stock or exchange my Common Units before the special meeting?

 

A:

If you are a holder of shares of GreenSky Class A common stock or Common Units, in order to receive the merger consideration, you must hold your shares of GreenSky Class A common stock or Common Units immediately prior to the effective time. Consequently, if you sell your shares of GreenSky Class A common stock or Common Units before the effective time, you will have transferred your right to receive the merger consideration if the mergers are completed.

The record date, which determines the GreenSky stockholders entitled to vote at the special meeting, is earlier than the effective time. If you are a holder of shares of GreenSky common stock and you transfer your shares of GreenSky common stock after the record date but prior to the effective time, you will retain any rights you hold to vote at the special meeting but will not have the right to receive the merger consideration.

 

Q:	Who will solicit and pay the costs of soliciting proxies?

 

A:

GreenSky will bear the expense of preparing, printing and mailing this proxy statement/prospectus and soliciting the proxies it is seeking. In addition to the use of mail, proxies may be solicited by officers, directors and employees of GreenSky, in person or by telephone, e-mail or facsimile transmission. GreenSky’s officers, directors and employees will receive no additional compensation for any such solicitations. GreenSky also will request banks, brokerage firms, nominees, custodians and fiduciaries to forward proxy materials to the beneficial owners of the underlying shares as of the record date and will reimburse the cost of forwarding the proxy materials in accordance with customary practice. Your cooperation in promptly voting by proxy will help to avoid additional expenses.

 

Q:	Should I send in my stock certificates now?

 

A:	No, please do NOT return your stock certificate(s) with your proxy. If the merger agreement is approved and adopted by GreenSky stockholders and the mergers are consummated, and you hold physical

 

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stock certificates, you will be sent a letter of transmittal and accompanying instructions as promptly as reasonably practicable after the completion of the mergers describing how you may exchange your shares of GreenSky Class A common stock for the merger consideration. If your shares of GreenSky Class A common stock are held in “street name” through a bank, brokerage firm, trustee or other nominee, you will receive instructions from your bank, brokerage firm, trustee or other nominee as to how to effect the surrender of your “street name” shares of GreenSky Class A common stock in exchange for the merger consideration.

 

Q:	Are there any voting agreements in place with GreenSky stockholders?

 

A:

Yes. On September 14, 2021, concurrently with the execution of the merger agreement and as a condition to GS Group’s and GS Bank’s entry into the merger agreement, GS Group and GS Bank entered into a voting agreement with David Zalik, chairman of the GreenSky board and GreenSky’s Chief Executive Officer, and certain of his affiliates, who as of September 30, 2021, collectively and in the aggregate, held voting power over approximately 56% of the outstanding GreenSky common stock, which shares held by Mr. Zalik and certain of his affiliates we refer to as the “subject shares.” Pursuant to the voting agreement, among other things, each such stockholder agreed to vote all of his or its subject shares in favor of the approval of the merger agreement and the transactions contemplated thereby. However, in the event of an “adverse recommendation change” (as defined in the section entitled “The Merger Agreement—Solicitation; Change in Recommendation”, beginning on page 112 of this proxy statement/prospectus), by the GreenSky board, the aggregate number of shares of GreenSky common stock required to be voted in favor of the approval of the merger agreement and the transactions contemplated thereby will be reduced to the aggregate number of shares representing 35% of the total voting power of GreenSky common stock, and each such stockholder’s obligation to vote its subject shares in favor of the approval of the merger agreement and the transactions contemplated thereby will be reduced by its pro rata portion of the excess subject shares.

 

Q:	Where can I find the voting results of the special meeting?

 

A:	The preliminary voting results will be announced at the special meeting. In addition, within four business days following certification of the final voting results, GreenSky will file the final voting results with the SEC on a Current Report on Form 8-K.

 

Q:	Are there any risks that I should consider in deciding whether to vote for the approval and adoption of the merger agreement?

 

A:

Yes. You should read and carefully consider the risk factors set forth in the section entitled “Risk Factors” beginning on page 30 of this proxy statement/prospectus. You also should read and carefully consider the risk factors of GS Group and GreenSky contained in the documents that are incorporated by reference into this proxy statement/prospectus. See the section entitled “Where You Can Find More Information” beginning on page 163 of this proxy statement/prospectus.

 

Q:	What are the conditions to consummation of the mergers?

 

A:

In addition to the approval of the GreenSky merger proposal by GreenSky stockholders as described above, consummation of the mergers is subject to the satisfaction of a number of other conditions, including the receipt of required regulatory approvals (as described in the section entitled “The Mergers—Regulatory Approvals” beginning on page 100 of this proxy statement/prospectus) and the expiration or termination of the statutory waiting period with respect to the HSR Act, in each case without the imposition of any materially burdensome regulatory condition, the accuracy of representations and warranties under the merger agreement (subject to the materiality standards set forth in the merger agreement), and GS Group’s and GreenSky’s performance of their respective obligations under the merger agreement in all material respects. For a more complete summary of the conditions that must be satisfied or waived prior to consummation of the mergers, see the section entitled “The Merger Agreement—Conditions to the Mergers” beginning on page 120 of this proxy statement/prospectus.

 

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Q:	What happens if the mergers are not consummated?

 

A:

If the mergers are not consummated, holders of GreenSky Class A common stock and Common Units will not receive any merger consideration in connection with the mergers, as applicable. Instead, GreenSky will remain an independent public company and its Class A common stock will continue to be listed and traded on the NASDAQ. Under circumstances specified in the merger agreement, GreenSky may be required to pay GS Group a fee of $75 million with respect to the termination of the merger agreement as described under the section entitled “The Merger Agreement—Termination Fee” beginning on page 122 of this proxy statement/prospectus.

 

Q:	If I am a GreenSky stockholder and I oppose the GreenSky merger proposal, but such proposal is approved, am I entitled to appraisal or dissenters’ rights in connection with the company merger?

 

A:	No. GreenSky stockholders are not entitled to appraisal rights under the DGCL. For more information, see the section entitled “The Mergers—No Appraisal or Dissenters’ Rights” beginning on page 100 of this proxy statement/prospectus.

 

Q:	How can I find more information about GS Group or GreenSky?

 

A:	You can find more information about GS Group or GreenSky from various sources described in the section entitled “Where You Can Find More Information” beginning on page 163 of this proxy statement/prospectus.

 

Q:	Who can help answer any other questions I have?

 

A:

The information provided above in the question-and-answer format is for your convenience only and is merely a summary of some of the information in this proxy statement/prospectus. You should carefully read the entire proxy statement/prospectus, including its annexes and information incorporated by reference. You may also wish to consult your legal, tax and/or financial advisors with respect to any aspect of the transactions, the merger agreement or other matters discussed in this proxy statement/prospectus.

If you have questions about the mergers or other matters to be voted on at the special meeting or desire additional copies of this proxy statement/prospectus or additional proxy or voting instructions, please contact:

GreenSky, Inc.

Attention: Investor Relations

5565 Glenridge Connector, Suite 700

Atlanta, Georgia 30342

(470) 284-7017

investors@greensky.com

 

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COMPARATIVE MARKET PRICE DATA

Shares of GS Group common stock are listed on the NYSE under the trading symbol “GS”. Shares of GreenSky Class A common stock are listed on the NASDAQ under the trading symbol “GSKY”.

The following table presents the closing prices of GreenSky Class A common stock and GS Group common stock on September 14, 2021, the last full trading day before the date of the public announcement of the merger agreement, and [—], the last practicable date prior to the date of this proxy statement/prospectus. The table also shows the estimated implied value of the merger consideration for each share of GreenSky Class A common stock on the relevant date.

 

Date		GreenSky Class A Common Stock Closing Price				GS Group Common Stock Closing Price				Exchange Ratio				Implied Per Share Value of Merger Consideration
September 14, 2021		$	7.77			$	403.69				0.03			$	12.11
[—]		$	[—	]		$	[—	]			0.03			$	[—	]

 

 

The above table shows only historical comparisons. These comparisons may not provide meaningful information to GreenSky stockholders in determining whether to approve the merger agreement. GreenSky stockholders are urged to obtain current market quotations for shares of GS Group common stock and GreenSky Class A common stock and to review carefully the other information contained in this proxy statement/prospectus or incorporated by reference into this proxy statement/prospectus in considering whether to approve the merger agreement.

Implied per share value of merger consideration is calculated by multiplying the per share price of each share of GS Group common stock by the exchange ratio and rounding up or down to the nearest cent. The market prices of GS Group common stock and GreenSky Class A common stock have fluctuated since the execution of the merger agreement and will continue to fluctuate between the date of this proxy statement/prospectus and the date of consummation of the mergers. Because the exchange ratio is fixed and the market price of GS Group common stock has fluctuated and will continue to fluctuate, holders of GreenSky Class A common stock and holders of Common Units cannot be certain, at the time they vote to approve the mergers, of the market value of the merger consideration they will receive in the mergers. Accordingly, GreenSky Class A stockholders and holders of Common Units are advised to obtain current market quotations for shares of GS Group common stock and shares of GreenSky Class A common stock in deciding whether to vote for approval and adoption of the merger agreement. No assurance can be given concerning the market prices of GreenSky Class A common stock or GS Group common stock before or after the effective date. Please see “Risk Factors—Risks Relating to the Mergers”.

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus, including information included or incorporated by reference into this proxy statement/prospectus, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, but not limited, to statements related to the proposed acquisition of GreenSky and the anticipated timing, results and benefits thereof, statements regarding the expectations and beliefs of the GreenSky board, GreenSky management, the board of directors of GS Group or GS Group management, and other statements that are not historical facts. Readers can generally identify forward-looking statements by the use of forward-looking terminology such as “outlook,” “potential,” “continue,” “may,” “seek,” “approximately,” “predict,” “believe,” “expect,” “plan,” “intend,” “poised,” “estimate” or “anticipate” and similar expressions or the negative versions of these words or comparable words, as well as future or conditional verbs such as “will,” “should,” “would,” “likely” and “could.” These forward-looking statements are based on GreenSky’s and GS Group’s current plans, objectives, estimates, expectations and intentions and inherently involve significant risks and uncertainties, many of which are beyond GreenSky’s or GS Group’s control. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks and uncertainties associated with GreenSky’s or GS Group’s ability to consummate the proposed mergers on the proposed terms or on the anticipated timeline, or at all, including:

 

•

risks and uncertainties related to securing the necessary regulatory and stockholder approvals and satisfaction of other closing conditions to consummate the proposed mergers;

 

•

the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement;

 

•

risks related to diverting the attention of GreenSky and/or GS Group management from ongoing business operations;

 

•

failure to realize the expected benefits of the proposed mergers;

 

•

significant transaction costs and/or unknown or inestimable liabilities;

 

•

the risk of litigation in connection with the proposed mergers, including resulting expense or delay;

 

•

the risk that GreenSky’s business will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected;

 

•

risks related to future opportunities and plans for GreenSky’s business, including the adaptability of GreenSky’s platform to additional industry verticals and origination channels and the uncertainty of financial performance and results of GS Group following consummation of the proposed mergers;

 

•

disruption from the proposed mergers, including the proposed mergers making it more difficult to conduct business as usual or for GreenSky to maintain relationships with bank partners, other funding sources or purchasers of receivables related to, or economic participations in, loans originated by GreenSky’s bank partners, merchants, sponsors of merchants, consumers, suppliers, distributors, partners, employees, regulators or other third parties;

 

•

effects relating to the announcement of the proposed mergers or any further announcements or the consummation of the proposed mergers on the market price of GreenSky common stock or GS Group common stock;

 

•

the possibility that, if GS Group does not achieve the perceived benefits of the proposed mergers as rapidly or to the extent anticipated by financial analysts or investors or at all, the market price of GS Group common stock could decline;

 

•

regulatory initiatives and changes in tax laws; and

 

•

market volatility and changes in economic conditions.

 

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In addition, the trajectory and future impact of the COVID-19 pandemic remains highly uncertain and can change rapidly, and the extent of the pandemic’s continuing and ultimate impact on GS Group, GS Bank, GreenSky, GreenSky’s bank partners and merchants, borrowers under the GreenSky program, loan demand (in particular, for elective healthcare procedures), legal and regulatory matters, consumers’ ability or willingness to pay, information security and consumer privacy, the capital markets, the economy in general and changes in the U.S. economy that could materially impact consumer spending behavior, unemployment and demand for products of GS Group and GreenSky are highly uncertain and cannot be predicted with confidence at this time. Moreover, other risks and uncertainties of which GreenSky or GS Group are not currently aware may also affect each company’s forward-looking statements and may cause actual results and the timing of events to differ materially from those anticipated.

Consequently, all of the forward-looking statements made by GS Group or GreenSky contained or incorporated by reference in this proxy statement/prospectus are qualified by factors, risks and uncertainties, including, but not limited to, those set forth under the headings titled “Risk Factors” beginning on page 30 of this proxy statement/prospectus and those set forth under the headings “Forward-Looking Statements” and “Risk Factors” in GS Group’s and GreenSky’s annual and quarterly reports and other filings with the SEC that are incorporated by reference into this proxy statement/prospectus. See the section entitled “Where You Can Find More Information” beginning on page 163 of this proxy statement/prospectus.

Readers of this proxy statement/prospectus are cautioned that forward-looking statements are not guarantees of future performance. The forward-looking statements made in this proxy statement/prospectus are made only as of the date hereof or as of the dates indicated in the forward-looking statements and reflect the views stated therein with respect to future events as at such dates, even if they are subsequently made available by GreenSky or GS Group on their respective websites or otherwise. Except as otherwise required by law, neither GreenSky nor GS Group undertakes any obligation, and each expressly disclaims any obligation, to update or supplement any forward-looking statements to reflect actual results, new information, future events, changes in its expectations or other circumstances that exist after the date as of which the forward-looking statements were made.

 

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RISK FACTORS

In addition to the other information contained in or incorporated by reference into this proxy statement/prospectus, including the matters addressed under the caption “Cautionary Statement Regarding Forward-Looking Statements” on page 28, you should consider the following risk factors carefully in deciding whether to vote to approve the merger agreement. Additional risks and uncertainties, if they materialize, not presently known to GS Group or GreenSky or that are not currently believed to be important to you, also may adversely affect the mergers.

In addition, the businesses of GS Group, GreenSky and their respective subsidiaries are subject to numerous risks and uncertainties, including the risks and uncertainties described in GS Group’s and GreenSky’s respective Annual Reports on Form 10-K for the fiscal year ended December 31, 2020. The Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that have been filed by GS Group and GreenSky with the SEC since GS Group’s and GreenSky’s respective Annual Reports were filed, or that may be filed with the SEC after the date of this proxy statement/prospectus, may also include descriptions of additional risks and uncertainties. Each such report is or will be incorporated by reference in this proxy statement/prospectus. See the section entitled “Where You Can Find More Information” beginning on page 163 of this proxy statement/prospectus.

Risks Relating to the Mergers

Because the exchange ratio is fixed and the market price of GS Group common stock has fluctuated and will continue to fluctuate, holders of GreenSky Class A common stock and holders of Common Units cannot be certain, at the time they vote to approve the mergers, of the market value of the merger consideration they will receive in the mergers.

Upon the consummation of the mergers, each (i) share of GreenSky Class A common stock issued and outstanding immediately prior to the company merger, except for shares of GreenSky Class A common stock owned by GreenSky as treasury shares or held by GS Group, GS Bank, Merger Sub 1 or Merger Sub 2 (in each case, not held on behalf of third parties, including in a fiduciary, custodial, nominee or similar capacity) and (ii) Common Unit issued and outstanding immediately prior to the Holdings merger, except for Common Units owned by GreenSky, will, in each case, be canceled and converted into the right to receive 0.03 shares of GS Group common stock.

There will be a time lapse between each of the date of this proxy statement/prospectus, the date on which GreenSky stockholders vote to adopt the merger agreement and thereby approve the mergers at the GreenSky special meeting and the date on which the holders of GreenSky Class A common stock and holders of Common Units entitled to receive shares of GS Group common stock actually receive such shares. Changes in prices of GS Group common stock prior to the consummation of the mergers will affect the merger consideration that holders of GreenSky Class A common stock and holders of Common Units will receive upon the consummation of the mergers. Stock price changes may result from a variety of factors, including general market and economic conditions, impacts and disruptions resulting from the COVID-19 pandemic, changes in GS Group’s businesses, operations and prospects and regulatory considerations, and other factors beyond the control of GS Group, including those described under this “Risk Factors” heading. Many of these factors are outside of the control of GS Group and GreenSky. Consequently, at the time GreenSky stockholders must decide whether to adopt the merger agreement, they will not know or be able to determine the actual market value of the shares of GS Group common stock they will receive when the mergers are consummated, which will depend on the market value of shares of GS Group common stock on that date.

The market value of GS Group common stock has fluctuated and will continue to fluctuate during these periods. For example, based on the range of closing prices of GS Group common stock during the period from September 14, 2021, the last full day of trading day before the date of the public announcement of the merger agreement, through [—], the last practicable date before the date of this proxy statement/prospectus, the exchange ratio of 0.03 represented a market value per share of GreenSky Class A common stock ranging from a

 

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low of $[—] to a high of $[—]. If the price of GS Group common stock declines between the date the merger agreement was signed and the date of the special meeting and the consummation of the mergers, including for any of the reasons described above, holders of GreenSky Class A common stock and holders of Common Units will receive shares of GS Group common stock that have a market value upon the consummation of the mergers that is less than the market value of such shares calculated pursuant to the exchange ratio on the date the merger agreement was signed or on the date of the special meeting, respectively.

Therefore, since the number of shares of GS Group common stock to be issued per share of GreenSky Class A common stock and per Common Unit is fixed, holders of GreenSky Class A common stock and holders of Common Units cannot be sure of the market value of the merger consideration they will receive upon the consummation of the mergers. You should obtain current market quotations for shares of GS Group common stock (traded on the NYSE under the trading symbol “GS”) and for shares of GreenSky Class A common stock (traded on NASDAQ under the trading symbol “GSKY”).

The market price for GS Group common stock may be affected by factors different from those that historically have affected GreenSky.

Upon the consummation of the mergers, holders of shares of GreenSky Class A common stock and holders of Common Units will receive as the merger consideration shares of GS Group common stock. GS Group’s businesses differ from that of GreenSky. GS Group is a global financial institution with greater than $1 trillion in assets that delivers a broad range of financial services across investment banking, securities, investment management and consumer banking to a large and diversified client base, while GreenSky is a technology company that provides point of sale financing solutions for a much narrower customer base in a more limited geographical area than the customer base and geographic area served by GS Group. Accordingly, the results of operations of GS Group will be affected by some factors that are different from those currently affecting the results of operations of GreenSky. Further, as a bank holding company and a financial holding company, GS Group is subject to different and, in many cases, more onerous regulations than GreenSky. For a discussion of the businesses of GS Group and GreenSky and of some important factors to consider in connection with those businesses, see the section entitled “The Parties to the Mergers” beginning on page 39 of this proxy statement/prospectus and the documents incorporated by reference referred to under the section entitled “Where You Can Find More Information” beginning on page 163 of this proxy statement/prospectus, including, in particular, in the section entitled “Risk Factors” in GS Group’s Annual Report on Form 10-K for the year ended December 31, 2020.

GreenSky stockholders will have a reduced ownership and voting interest in GS Group after the consummation of the mergers and will exercise less influence over management.

The mergers will result in GreenSky stockholders having an ownership stake in GS Group that is significantly smaller than their current ownership stake in GreenSky. Currently, GreenSky’s stockholders have the right to vote in the election of the board of directors of GreenSky and the power to approve or reject any matters requiring stockholder approval under Delaware law, the GreenSky charter and/or the GreenSky bylaws. Upon the consummation of the mergers, each GreenSky Class A stockholder and holder of Common Units who receives shares of GS Group common stock will become a stockholder of GS Group with a percentage ownership of GS Group attributable to the former ownership of GreenSky common stock or Common Units that is significantly smaller than their current percentage ownership of GreenSky or GreenSky Holdings, respectively. Following the consummation of the company merger, based on the number of shares of GS Group common stock outstanding as of [—], the latest practicable date before the date of this proxy statement/prospectus, former GreenSky stockholders will own approximately [—]% of the outstanding shares of GS Group common stock, without giving effect to any shares of GS Group common stock held by GreenSky stockholders prior to the mergers. Because of this, GreenSky stockholders would exercise significantly less influence over GS Group after the mergers relative to their influence over GreenSky prior to the mergers, and thus would have a less significant impact on the approval or rejection of future GS Group proposals submitted to a stockholder vote.

 

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GS Group may be unable to successfully integrate GreenSky’s operations and may not realize the anticipated benefits of acquiring GreenSky.

GS Group and GreenSky have operated and, until the consummation of the mergers, will continue to operate, independently. The success of the mergers, including anticipated benefits and cost savings, will depend, in part, on GS Group’s ability to successfully integrate GreenSky’s operations in a manner that results in various benefits, including, among other things, expanded offerings in the consumer banking space, an improved technology platform and digital product suite and broader operating efficiencies that will strengthen GS Group’s ability to meet the financial needs of new clients, customers, business partners and consumers without materially disrupting existing client relationships or resulting in decreased revenues due to loss of clients. The process of integrating operations could result in a loss of key personnel or cause an interruption of, or loss of momentum in, the activities of one or more of GS Group’s businesses or inconsistencies in standards, controls, procedures and policies that adversely affect the ability of GS Group to maintain relationships with clients and employees. The diversion of management’s attention and any delays or difficulties encountered in connection with the mergers and the integration of GreenSky’s operations could have an adverse effect on the business, financial condition, operating results and prospects of GS Group after the mergers.

If GS Group experiences difficulties in the integration process, including those listed above, GS Group may fail to realize the anticipated benefits of the mergers in a timely manner, or at all. Failure to achieve these anticipated benefits could result in increased costs, decreases in the amount of expected revenues and diversion of management’s time and energy and could have an adverse effect on GS Group’s business, financial condition, operating results and prospects. In particular, the impacts of the COVID-19 pandemic may make it more costly or more difficult for GS Group to effect the integration of GreenSky into its current operations, which, in turn, may make it more difficult for GS Group to realize anticipated benefits or cost savings in the amounts estimated or in the time frame contemplated or at all.

Among the factors considered by the boards of directors of GS Group and GreenSky in connection with their respective approvals of the merger agreement were the benefits that could result from the mergers. We cannot give any assurance that these benefits will be realized within a timely manner, or at all.

The merger agreement limits GreenSky’s ability to pursue alternatives to the mergers and includes provisions that could discourage a potential competing acquirer of GreenSky or could result in any competing proposal being at a lower price than it might otherwise be.

The merger agreement contains “no shop” covenants that prohibit GreenSky from soliciting or, subject to certain exceptions relating to the exercise of fiduciary duties by the GreenSky board, entering into discussions with any third party regarding, any acquisition proposal or offers for competing transactions. GreenSky may also be required to pay GS Group a termination fee of $75 million in certain circumstances involving a termination of the merger agreement and acquisition proposals for competing transactions. GreenSky does not have the right to terminate the merger agreement to accept an alternative acquisition proposal. Accordingly, notwithstanding a change in recommendation by the GreenSky board, unless GS Group terminates the merger agreement following such change in recommendation or the merger agreement is otherwise validly terminated, GreenSky will still be required to convene the special meeting and submit the GreenSky merger proposal to the GreenSky stockholders for approval. See the sections entitled “The Merger Agreement—Termination of the Merger Agreement” and “The Merger Agreement—Termination Fee” beginning on pages 121 and 122, respectively.

Additionally, on September 14, 2021, concurrently with the execution of the merger agreement and as a condition to GS Group’s and GS Bank’s entry into the merger agreement, GS Group and GS Bank entered into a voting agreement with David Zalik, Chairman of the GreenSky board and GreenSky’s Chief Executive Officer, and certain of his affiliates, who as of September 30, 2021, collectively and in the aggregate, held voting power over approximately 56% of the outstanding GreenSky common stock, which shares held by Mr. Zalik and certain of his affiliates we refer to as the “subject shares.” Pursuant to the voting agreement, among other things, each such stockholder agreed to vote all of his or its subject shares in favor of the approval of the merger agreement

 

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and the transactions contemplated thereby. However, in the event of an “adverse recommendation change” (as defined in the section entitled “The Merger Agreement—Solicitation; Change in Recommendation”, beginning on page 112 of this proxy statement/prospectus) by the GreenSky board, the aggregate number of shares of GreenSky common stock required to be voted in favor of the approval of the merger agreement and the transactions contemplated thereby will be reduced to the aggregate number of shares representing 35% of the total voting power of GreenSky common stock, and each such stockholder’s obligation to vote its subject shares in favor of the approval of the merger agreement and the transactions contemplated thereby will be reduced by its pro rata portion of the excess subject shares. These provisions could discourage a potential competing acquirer that might have an interest in acquiring all or a significant part of GreenSky from considering or proposing such an acquisition, even if it were prepared to pay consideration with a higher per share cash or market value than that market value proposed to be received in the mergers, or might result in a potential competing acquirer proposing to pay a lower price than it might otherwise have proposed to pay because of the added expense of the termination fee that may become payable in specified circumstances under the merger agreement.

The merger agreement may be terminated in accordance with its terms and the mergers may not be completed.

The merger agreement is subject to a number of conditions which must be fulfilled in order to complete the mergers, including, among others: the approval of the GreenSky merger proposal, the receipt of required regulatory approvals and expiration or termination of all statutory waiting periods in respect thereof (as further described in the section entitled “The Mergers—Regulatory Approvals” beginning on page 100 of this proxy statement/prospectus); the accuracy of representations and warranties under the merger agreement (subject to the materiality standards set forth in the merger agreement); GS Group’s and GreenSky’s performance of their respective obligations under the merger agreement in all material respects; the effectiveness of this registration statement; and the tax receivable agreement, as amended by the tax receivable agreement amendment, not having been further amended and being in full force and effect.

Neither GS Group nor GreenSky can provide assurance that the conditions to the closing of the mergers will be satisfied or waived, and accordingly, that the mergers will be completed on the terms or timeline that the parties anticipate, or at all. If any condition to the mergers is not satisfied, it could delay or prevent the mergers from occurring, which could negatively impact the price of GreenSky common stock or GS Group common stock and the parties’ business, financial condition, results of operations and growth prospects. In addition, if the mergers are not completed by April 15, 2022 (which we refer to as the “outside date”), either GS Group or GreenSky may choose not to proceed with the mergers, and the parties can mutually decide to terminate the merger agreement at any time, before or after GreenSky stockholder approval of the GreenSky merger proposal.

In addition to the above risks, GS Group and GreenSky may elect to terminate the merger agreement in certain other limited circumstances. See the section entitled “The Merger Agreement—Termination of the Merger Agreement” beginning on page 121 of this proxy statement/prospectus for a description of these circumstances. If the merger agreement is terminated under certain circumstances, GreenSky may be required to pay a termination fee of $75 million to GS Group. See the section entitled “The Merger Agreement—Termination Fee” beginning on page 123 of this proxy statement/prospectus for a fuller description of these circumstances.

Failure to complete the mergers could negatively impact the stock price and the future business and financial results of GreenSky.

If the mergers are not completed for any reason, including as a result of GreenSky stockholders declining to adopt the merger agreement, the ongoing business of GreenSky may be adversely affected and, without realizing any of the benefits of having completed the mergers, GreenSky would be subject to a number of risks, including the following:

 

•

GreenSky may experience negative reactions from the financial markets, including negative impacts on its stock price;

 

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•

GreenSky may experience negative reactions from its regulators, merchant partners, sponsors of merchants, bank partners, other funding sources or purchasers of receivables related to, or economic participations in, loans originated by bank partners, customers, vendors, and employees;

 

•

the merger agreement imposes certain restrictions on the conduct of GreenSky’s business prior to completion of the mergers, which restrictions may prevent GreenSky from taking certain actions or otherwise pursuing business opportunities during the pendency of the mergers that GreenSky would have taken or pursued had these restrictions not been in effect;

 

•

GreenSky will have incurred substantial expenses and will be required to pay these expenses and other costs it will have incurred relating to the mergers, whether or not the mergers are consummated; and

 

•

matters relating to the mergers (including integration planning) will require substantial commitments of time and resources by GreenSky management, which would otherwise have been devoted to day-to-day operations and other opportunities that may have been beneficial to GreenSky as an independent company.

In addition to the above risks, if the merger agreement is terminated and the GreenSky board seeks another merger or business combination, GreenSky stockholders cannot be certain that GreenSky will be able to find a party willing to offer equivalent or more attractive consideration than the consideration GS Group has agreed to provide in the mergers. If the merger agreement is terminated under certain circumstances, GreenSky may be required to pay a termination fee of $75 million to GS Group. See the section entitled “The Merger Agreement—Termination Fee” beginning on page 123 of this proxy statement/prospectus.

The COVID-19 pandemic and events related to it may delay or adversely affect the completion of the mergers.

The COVID-19 pandemic and events related to it may adversely affect the business, financial condition and results of operations of GS Group and GreenSky. If the businesses or operations of GS Group or GreenSky are disrupted as a result of the COVID-19 pandemic and events related to it, efforts to complete the mergers and integrate the businesses of GS Group and GreenSky may be delayed and adversely affected. Additional time may be required to obtain the requisite regulatory approvals, and the bank regulatory and other governmental authorities may impose additional requirements on GS Group and GreenSky that must be satisfied prior to completion of the mergers, which could delay or adversely affect the completion of the mergers.

Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or cannot be met.

Before the transactions contemplated by the merger agreement, including the mergers, may be completed, various approvals must be obtained from bank regulators and other governmental authorities as described in the section entitled “The Merger—Regulatory Approvals” beginning on page 100 of this proxy statement/prospectus. In determining whether to grant these approvals, such regulators will consider a variety of factors, including the regulatory standing of each party. These approvals could be delayed or not obtained at all, including due to: an adverse development in either party’s regulatory standing, or any other factors considered by regulators in granting such approvals; governmental, political or community group inquiries, investigations or opposition; changes in legislation or the political environment generally; or impacts and disruptions resulting from the COVID-19 pandemic. These governmental entities may impose conditions, limitations or costs or place restrictions on the conduct of GS Group after the closing as a condition to the granting of such approvals or require changes to the terms of the company merger or the Holdings merger. Such conditions or changes and the process of obtaining regulatory approvals could have the effect of delaying completion of the mergers or of imposing additional costs or limitations on GS Group following the mergers, any of which might have an adverse effect on GS Group following the mergers.

 

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GreenSky will be subject to business uncertainties and contractual restrictions while the mergers are pending, which could adversely affect its business.

Uncertainty about the effect of the mergers on employees and customers may have an adverse effect on GreenSky and, consequently, GS Group following the consummation of the mergers. These uncertainties may impair GreenSky’s ability to attract, retain and motivate key personnel until the mergers are consummated and for a period of time thereafter, and could cause customers and others that deal with GreenSky to seek to change their existing business relationships with GreenSky. Employee retention at GreenSky may be particularly challenging during the pendency of the mergers, as employees may experience uncertainty about their roles with GS Group and its affiliates following the mergers. In addition, the merger agreement restricts GreenSky from making certain acquisitions and taking other specified actions without the consent of GS Group, and generally requires GreenSky to continue its operations in the ordinary course, until the mergers close. These restrictions may prevent GreenSky from pursuing attractive business opportunities that may arise prior to the completion of the mergers. Please see the section entitled “The Merger Agreement—Conduct of Businesses” beginning on page 110 of this proxy statement/prospectus for a description of the restrictive covenants to which GreenSky is subject.

Directors and executive officers of GreenSky may have interests in the mergers that are different from, or in addition to, the interests of GreenSky stockholders.

GreenSky stockholders should be aware that some of GreenSky’s directors and executive officers may have interests in the mergers and have arrangements that are different from, or in addition to, those of GreenSky stockholders generally. The members of the GreenSky board and the members of the GreenSky special committee were aware of and considered these interests in reaching the determination, in the case of the GreenSky special committee, to recommend the mergers to the GreenSky board and, in the case of the GreenSky board, to approve and adopt the merger agreement and other related agreements and recommend to GreenSky stockholders that they vote in favor of the GreenSky merger proposal. For additional information, see “The Mergers—Interests of GreenSky’s Directors and Executive Officers in the Mergers” beginning on page 94 of this proxy statement/prospectus.

Shares of GS Group common stock to be received by holders of GreenSky Class A common stock and holders of Common Units as a result of the mergers will have rights different from the shares of GreenSky Class A common stock and Common Units, respectively.

Upon the consummation of the mergers, the rights of former GreenSky stockholders and former holders of Common Units will be governed by the GS Group charter and the GS Group by-laws. Even though both GS Group and GreenSky are incorporated under the laws of the State of Delaware, the rights afforded to GS Group stockholders differ from the rights afforded to GreenSky stockholders and may be less favorable than their current rights as GreenSky stockholders. Further, the rights associated with GS Group common stock are different from the rights associated with the Common Units and the terms of Georgia law applicable to limited liability companies, which currently governs the rights of holders of Common Units and may be less favorable than their current rights as holders of Common Units. Please see the section entitled “Comparison of Equityholder Rights” beginning on page 141 of this proxy statement/prospectus for a discussion of the different rights associated with GS Group common stock.

GS Group will incur certain transaction and merger-related costs in connection with the mergers.

Each of GS Group and GreenSky has incurred and will incur certain expenses in connection with the negotiation and completion of the transactions contemplated by the merger agreement, as well as the costs and expenses of filing, printing and mailing this proxy statement/prospectus and other fees paid to the SEC in connection with the mergers.

GS Group expects to continue to incur a number of non-recurring costs associated with completing the mergers, combining the operations of the two companies and achieving desired synergies. The substantial

 

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majority of non-recurring expenses will be comprised of transaction costs related to the mergers and include, but are not limited to, fees paid to legal, financial and accounting advisors, severance and benefit, technology integration costs and filing fees.

GS Group also will incur transaction fees and costs related to formulating and implementing integration plans, including facilities and systems consolidation costs and employment-related costs. GS Group continues to assess the magnitude of these costs, and additional unanticipated costs may be incurred in the mergers and the integration of the two companies’ businesses. Although GS Group expects that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, should allow GS Group to offset integration-related costs over time, this net benefit may not be achieved in the near term, or at all. The aggregate amount and timing of such charges are uncertain at present. See the risk factor entitled “GS Group may be unable to successfully integrate GreenSky’s operations and may not realize the anticipated benefits of acquiring GreenSky” above.

If it is determined the company merger does not qualify as a tax-free “reorganization” for U.S. federal income tax purposes, U.S. holders of GreenSky Class A common stock will generally recognize capital gain or loss as a result of the company merger.

As further described below in “Material United States Federal Income Tax Consequences” beginning on page 124 of this proxy statement/prospectus, it is the opinion of Cravath, Swaine & Moore LLP and Sullivan & Cromwell LLP that the company merger should qualify as a tax-free “reorganization” within the meaning of Section 368(a) of the Code. However, such opinions are not binding on the IRS or any court, nor is the receipt of further opinions a condition to the closing of the mergers. If it is determined the company merger does not qualify as a tax-free “reorganization”, the company merger would be a taxable transaction to GreenSky stockholders for U.S. federal income tax purposes. In that case, a U.S. holder (as defined below in the section entitled “Material United States Federal Income Tax Consequences”) would generally recognize capital gain or loss measured by reference to the fair market value of GS Group common stock received in exchange for such U.S. holder’s GreenSky Class A common stock. For more information about the tax consequences related to the company merger, see the section entitled “Material United States Federal Income Tax Consequences—Tax Consequences of the Company Merger” beginning on page 126 of this proxy statement/prospectus.

Completion of the mergers may trigger change in control or other provisions in certain agreements to which GreenSky or one of its subsidiaries is a party.

The completion of the mergers may trigger “change in control” and other provisions in certain agreements to which GreenSky or one of its subsidiaries is a party. If GS Group and GreenSky are unable to negotiate waivers of those provisions, the counterparties may exercise their rights and remedies under the agreements, potentially terminating the agreements or seeking monetary damages or equitable remedies. Even if GS Group and GreenSky are able to negotiate consents or waivers, the counterparties may require a fee for such waivers or seek to renegotiate the agreements on terms less favorable to GreenSky. There is no assurance that such counterparties will not exercise their rights under the agreements, including termination rights where available, that the exercise of any such rights will not result in a material adverse effect or that any modifications of such agreements will not result in a material adverse effect.

GS Group or GreenSky may waive one or more of the closing conditions without GreenSky re-soliciting GreenSky stockholder approval.

Certain conditions to GS Group’s and GreenSky’s obligations, respectively, to complete the mergers may be waived, in whole or in part, to the extent legally permissible, either unilaterally by such party or by agreement of GS Group and GreenSky. In the event of any such waiver, the parties will have the discretion to complete the mergers without seeking further approval of GreenSky stockholders.

 

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The opinions delivered by J.P. Morgan to the GreenSky board and Piper Sandler to the GreenSky special committee have not been, and are not expected to be, updated to reflect any changes in circumstances that may have occurred since the date of the opinions.

The opinion rendered by J.P. Morgan, financial advisor to GreenSky, to the GreenSky board on September 14, 2021, and the opinion rendered by Piper Sandler, financial advisor to the GreenSky special committee, to the GreenSky special committee on September 14, 2021, were each based upon such information available to J.P. Morgan or Piper Sandler, as the case may be, as of the date of each such opinion. The opinions do not reflect any events or changes that may have occurred or that otherwise have come to such financial advisors after the date on which such opinions were delivered, including changes to the business, financial condition, results of operations and prospects of GS Group or GreenSky, changes in business, financial, economic, market and other conditions, or other events or changes which may be beyond the control of GS Group and GreenSky, including the impact of the COVID-19 pandemic after September 14, 2021 and other risks and uncertainties. Any such changes may alter the relative value of GS Group or GreenSky or the prices at which shares of GS Group common stock or GreenSky Class A common stock may trade prior to the time the mergers are completed. The opinions do not speak as of the date the mergers will be completed or as of any date other than the date of such opinions, and the financial advisors did not assume any obligation to update their respective opinion. For more information about the respective opinions delivered by J.P. Morgan and Piper Sandler, see “The Merger—Opinion of J.P. Morgan, GreenSky’s Financial Advisor” beginning on page 76, “The Merger—Opinion of Piper Sandler, GreenSky Special Committee’s Financial Advisor” beginning on page 82, Annex B and Annex C to this proxy statement/prospectus.

Issuance of shares of GS Group common stock in connection with the mergers may adversely affect the market price of GS Group common stock.

In connection with the payment of the merger consideration, GS Group expects to issue approximately [—] shares of GS Group common stock to the holders of GreenSky Class A common stock and holders of Common Units. The issuance of these new shares of GS Group common stock may result in fluctuations in the market price of GS Group common stock, including a stock price decrease.

Neither GreenSky stockholders nor holders of Common Units will have dissenters’ rights or appraisal rights in the mergers.

Appraisal rights (also known as dissenters’ rights) are statutory rights that, if applicable under law, enable stockholders to dissent from an extraordinary transaction, such as a merger, and to demand that the corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to stockholders in connection with the extraordinary transaction.

Under Section 262 of the DGCL, holders of GreenSky Class A common stock will not be entitled to appraisal rights in connection with the company merger if, on the record date of the GreenSky special meeting, shares of GreenSky Class A common stock are listed on a national securities exchange or held of record by more than two thousand (2,000) stockholders, and holders of GreenSky Class A common stock are not required to accept as consideration for their shares anything other than the shares of GS Group listed on a national securities exchange or held of record by more than two thousand (2,000) stockholders, cash paid in lieu of fractional shares or any combination of the foregoing. Holders of GreenSky Class A common stock will receive shares of GS Group common stock as consideration in the merger, which shares are currently listed on NYSE, and are expected to continue to be so listed at the effective time. Accordingly, the holders of GreenSky Class A common stock are not entitled to any appraisal rights in connection with the company merger.

In addition, since the Holdings merger will occur immediately prior to the company merger, all shares of GreenSky Class B common stock will be automatically deemed transferred to GreenSky and canceled and cease to exist at the effective time of the Holdings merger, which is prior to the effective time of the company merger. Accordingly, no shares of GreenSky Class B common stock will be outstanding at the effective time of the

 

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company merger and the holders of GreenSky Class B common stock as of immediately prior to the Holdings merger effective time will not be entitled to any appraisal rights in connection with the company merger.

Under Section 14-11-1002 of the GLLCA, a record member of a limited liability company is entitled, in certain circumstances, to dissent from, and obtain payment of the fair value of his or her membership interest in the event of consummation of a plan of merger, unless otherwise provided by the company’s articles of organization or written operating agreement. Since the GreenSky Holdings operating agreement provides that holders of Common Units are not entitled to dissenters’ or appraisal rights, holders of Common Units are not entitled to any appraisal rights in connection with the Holdings merger.

See “The Merger—No Appraisal or Dissenters’ Rights” on page 100 of this proxy statement/prospectus.

Stockholder litigation could prevent or delay the completion of the mergers or otherwise negatively impact the business and operations of GS Group and GreenSky.

Transactions like the mergers are frequently the subject of litigation or other legal proceedings, including actions alleging that either parties’ board of directors breached their respective duties to their stockholders by entering into a merger agreement, by failing to obtain a greater value in a transaction for their stockholders or any other claims (contractual or otherwise) arising out of a merger or the transactions related thereto. Stockholders of GS Group and/or GreenSky may file lawsuits against GreenSky, GS Group and/or the directors and officers of either company in connection with the mergers. One of the conditions to the closing is that no order, injunction or decree issued by any court or governmental entity of competent jurisdiction or other legal restraint preventing the consummation of the mergers or any of the other transactions contemplated by the merger agreement be in effect. If any plaintiff were successful in obtaining an injunction prohibiting GS Group or GreenSky from consummating the mergers or any of the other transactions contemplated by the merger agreement, then such injunction may delay or prevent the effectiveness of the mergers and could result in significant costs to GS Group and/or GreenSky, including any cost associated with the indemnification of directors and officers of each company. GS Group and GreenSky may incur costs in connection with the defense or settlement of any stockholder lawsuits filed in connection with the mergers. Such litigation could have an adverse effect on GS Group’s or GreenSky’s ability to consummate the mergers or on their respective financial condition, results of operations and growth prospects, including through the possible diversion of either company’s resources or distraction of key personnel.

Risks Relating to GS Group’s Business

You should read and consider risk factors specific to GS Group’s business. These risks are described in the sections entitled “Risk Factors” in GS Group’s Annual Report on Form 10-K for the year ended December 31, 2020 and in other documents incorporated by reference into this proxy statement/prospectus. Please see the section entitled “Where You Can Find More Information” beginning on page 163 of this proxy statement/prospectus for the location of information incorporated by reference into this proxy statement/prospectus.

Risks Relating to GreenSky’s Business

You should read and consider risk factors specific to GreenSky’s business. These risks are described in the sections entitled “Risk Factors” in GreenSky’s Annual Report on Form 10-K for the year ended December 31, 2020 and in other documents incorporated by reference into this proxy statement/prospectus. Please see the section entitled “Where You Can Find More Information” beginning on page 163 of this proxy statement/prospectus for the location of information incorporated by reference into this proxy statement/prospectus.

 

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THE PARTIES TO THE MERGERS

The Goldman Sachs Group, Inc.

200 West Street

New York, New York 10282

(212) 902-1000

The Goldman Sachs Group, Inc. is a leading global financial institution that delivers a broad range of financial services across investment banking, securities, investment management and consumer banking to a large and diversified client base that includes corporations, financial institutions, governments and individuals. GS Group’s purpose is to advance sustainable economic growth and financial opportunity. GS Group’s goal, reflected in its One Goldman Sachs initiative, is to deliver the full range of its services and expertise to support its clients in a more accessible, comprehensive and efficient manner, across businesses and product areas. GS Group’s principal executive offices are located at 200 West Street, New York, New York 10282, telephone (212) 902-1000. GS Group is a bank holding company and a financial holding company regulated by the Board of Governors of the Federal Reserve System.

GS Group common stock is currently listed on the NYSE under the symbol “GS.”

Goldman Sachs Bank USA

200 West Street

New York, New York 10282

(212) 902-1000

Goldman Sachs Bank USA is a New York State-chartered bank and the U.S. depository institution subsidiary of GS Group.

Merger Sub 1

[—], a wholly owned subsidiary of GS Bank, is a Delaware limited liability company formed on [—], for the purpose of effecting the company merger. [—] has not conducted any activities other than those incidental to its formation and the matters contemplated by the merger agreement. The principal executive offices of [—] are located at 200 West Street, New York, New York 10282, telephone (212) 902-1000.

Merger Sub 2

[—], a wholly owned subsidiary of GS Bank, is a Georgia limited liability company formed on [—], for the purpose of effecting the Holdings merger. [—] has not conducted any activities other than those incidental to its formation and the matters contemplated by the merger agreement. The principal executive offices of [—] are located at 200 West Street, New York, New York 10282, telephone (212) 902-1000.

GreenSky, Inc.

5565 Glenridge Connector, Suite 700

Atlanta, Georgia 30342

(678) 264-6105

GreenSky, Inc., headquartered in Atlanta, is a leading technology company Powering Commerce at the Point of Sale® for a growing ecosystem of merchants, consumers and banks. GreenSky’s highly scalable, proprietary and patented technology platform enables merchants to offer frictionless promotional payment options to consumers, driving increased sales volume and accelerated cash flow. Banks leverage GreenSky’s technology to provide loans to super-prime and prime consumers nationwide. GreenSky currently services a $9 billion loan portfolio, and since GreenSky’s inception, approximately 4 million consumers have financed more than $30 billion of commerce using GreenSky’s paperless, real-time “apply and buy” technology.

 

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GreenSky is a holding company that, together with GreenSky Holdings, owns GreenSky, LLC and its subsidiaries, which are operating companies that conduct the business of GreenSky. GreenSky was formed on July 12, 2017 for the purpose of completing an initial public offering of its Class A common stock. GreenSky’s principal executive offices are located at 5565 Glenridge Connector, Suite 700 Atlanta, Georgia 30342, telephone (678) 264-6105.

GreenSky Class A common stock is currently listed on NASDAQ under the symbol “GSKY.”

GreenSky Holdings, LLC

5565 Glenridge Connector, Suite 700

Atlanta, Georgia 30342

(678) 264-6105

GreenSky Holdings, LLC is a holding company that, together with GreenSky, owns GreenSky, LLC and its subsidiaries, which are operating companies that conduct the business of GreenSky. GreenSky Holdings, LLC was formed in August 2017 to serve as a holding company for GreenSky, LLC. GreenSky Holdings’ principal executive offices are located at 5565 Glenridge Connector, Suite 700 Atlanta, Georgia 30342, telephone (678) 264-6105.

 

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THE MERGERS

This section describes the mergers. The description in this section and elsewhere in this proxy statement/prospectus is qualified in its entirety by reference to the complete text of the merger agreement, a copy of which is attached as Annex A and is incorporated by reference into this proxy statement/prospectus. This summary does not purport to be complete and may not contain all of the information about the mergers that is important to you. You are encouraged to read the merger agreement carefully and in its entirety. This section is not intended to provide you with any factual information about GreenSky or GS Group. Such information can be found elsewhere in this proxy statement/prospectus and in the public filings GreenSky and GS Group make with the SEC that are incorporated by reference into this document, as described in the section entitled “Where You Can Find More Information” beginning on page 163 of this proxy statement/prospectus.

Background of the Transactions

As part of their ongoing review of GreenSky’s business, the GreenSky board and senior management team periodically review and evaluate GreenSky’s business and long-term strategy, competitive position, prospects and opportunities to increase stockholder value. These reviews have included considering the continued execution of GreenSky’s strategy as a stand-alone company, changes to GreenSky’s funding model and relationships with its bank funding partners and the possible sale of GreenSky to a third party.

The GS Group board, together with GS Group management, regularly considers and evaluates potential strategic opportunities, as well as developments in GS Group’s businesses, the financial markets, the financial services industry, economic conditions and the regulatory environment, with the goal of enhancing value for GS Group’s stockholders.

On July 29, 2019, the GreenSky board held an in-person meeting, together with members of senior management and representatives of J.P. Morgan and Financial Technology Partners LP (which we refer to as “FT Partners”), financial advisors to GreenSky, and representatives of Cravath, Swaine & Moore LLP and Troutman Sanders Pepper Hamilton LLP (which we refer to as “Cravath” and “Troutman Pepper” respectively), outside counsel to GreenSky, to discuss whether it might make sense for the GreenSky board to consider possible strategic alternatives that may be available to GreenSky, including possible transactions involving a sale, merger, investment or other similar transaction. GreenSky and the GreenSky board had selected J.P. Morgan and FT Partners as financial advisors given their familiarity with GreenSky, their expertise and contacts in the financial technology and financial services industries and their expertise with respect to advising companies in these types of strategic alternative reviews and in connection with mergers and acquisitions transactions. In particular, J.P. Morgan and FT Partners had acted as a joint bookrunner and a financial advisor, respectively, in connection with GreenSky’s initial public offering.

At the meeting, the representatives of Cravath reviewed with the GreenSky board their fiduciary duties under Delaware law, both generally and in the context of conducting a review of strategic alternatives and any potential transaction. In this discussion, the representatives of Cravath reviewed with the GreenSky board considerations specific to companies with a controlling stockholder, as Mr. David Zalik, the founder and Chief Executive Officer of GreenSky, held and continues to hold a controlling voting interest in GreenSky. In particular, the representatives of Cravath reviewed whether and when it might be advisable for the GreenSky board to form a special committee of directors and subject a transaction to a “majority of the minority” stockholder vote in different transaction scenarios. The GreenSky board noted these considerations and determined that it would revisit these considerations as the process evolved and at the appropriate time.

At the meeting, the representatives of J.P. Morgan and FT Partners also provided an overview of the then-current market and economic backdrop, as well as certain financial information regarding GreenSky’s performance and outlook relative to its industry peers. The representatives of J.P. Morgan and FT Partners discussed the potential merits of GreenSky seeking stable bank partner funding and that volatility in GreenSky’s

 

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stock price likely did not engender market confidence conducive to maintaining stable funding. The representatives of J.P. Morgan and FT Partners reviewed potential strategic alternatives, including remaining independent, fundamentally changing GreenSky’s business model to diversify its funding and a potential sale to a strategic or financial buyer, as well as potential partners for a sale transaction.

During the meeting, the GreenSky board and senior management discussed the relative benefits of different alternatives and concluded that, due to the volatility of GreenSky’s stock price, the ongoing concern among investors regarding GreenSky’s bank funding model and the complexity of GreenSky’s operating model, it would be in the best interests of GreenSky stockholders to consider and evaluate strategic alternatives focused on maximizing stockholder value. The GreenSky board authorized senior management, with the assistance of its financial and legal advisors, to commence a process to consider and evaluate all strategic alternatives that might be available to GreenSky, and to potentially solicit interest from third parties regarding a sale transaction. The GreenSky board also concluded that it would be optimal to publicly disclose this decision so as to permit GreenSky to conduct a full survey of the market.

On August 5, 2019, the GreenSky board executed a unanimous written consent authorizing the engagement of J.P. Morgan as financial advisor to GreenSky and the GreenSky board in connection with its evaluation of strategic alternatives. The GreenSky board did not need to authorize the engagement of FT Partners in this regard, as FT Partners already had an existing engagement letter with GreenSky that was applicable to the strategic alternatives review.

On August 6, 2019, GreenSky publicly announced that it was evaluating strategic alternatives. Thereafter, at the direction of the GreenSky board, representatives of J.P. Morgan and FT Partners had preliminary discussions with potential acquirors of GreenSky, including GS Group.

On September 4, 2019, the GreenSky board held an in-person meeting to discuss the GreenSky strategic alternatives review, including whether to launch a formal sale process for a potential acquisition of GreenSky. Members of GreenSky senior management and representatives of J.P. Morgan, FT Partners, Cravath and Troutman Pepper were in attendance. The representatives of J.P. Morgan and FT Partners reviewed different strategic alternatives potentially available to GreenSky, including a potential sale transaction, and initial feedback from the preliminary discussions with potential acquirors, including the identities of such potential acquirors, that had occurred following the public announcement of the strategic alternatives review. The representatives of J.P. Morgan and FT Partners then presented their respective preliminary valuation analyses with respect to GreenSky on a stand-alone basis. After discussing the various strategic alternatives potentially available to GreenSky, including a potential sale transaction, and the potential acquirors, the GreenSky board authorized J.P. Morgan and FT Partners to launch a formal sale process for a potential acquisition of GreenSky and to continue soliciting interest from the potential acquirors that had engaged in preliminary discussions with J.P. Morgan and FT Partners.

Among other things discussed at the meeting, the GreenSky board discussed that it was possible that certain potential acquirors might request that Mr. Zalik (and potentially Mr. Robert Sheft, a director of GreenSky who, through a related entity, then held approximately 12% of the outstanding equity of GreenSky) roll over a portion of their equity interests in a transaction. In this discussion, Mr. Zalik said that he would be open to doing so if it would be helpful to facilitate a transaction, but that he would take direction from the GreenSky board on whether, how and when to engage in any such discussions with potential acquirors. Also during this discussion, the representatives of Cravath and Troutman Pepper advised the GreenSky board that neither Mr. Zalik nor any member of GreenSky management should engage in any discussion regarding a rollover or post-transaction employment with any potential acquirors until authorized by the GreenSky board, other than Mr. Zalik confirming that he would be open to such discussions at the appropriate time and when authorized by the GreenSky board. The GreenSky board expressed its view that this instruction was important because it wanted to ensure that Mr. Zalik’s interests were aligned with all GreenSky stockholders in obtaining the best value for the equity of GreenSky were a sale of GreenSky to occur. The GreenSky board also discussed that Mr. Zalik

 

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indicating that he would be open to a rollover would be helpful to the process because certain buyers might not be willing to make a proposal without knowing that a rollover was possible. Mr. Zalik stated that his goal was value maximization for all GreenSky stockholders and that he understood the instructions from the GreenSky board and would abide by them.

In August and September of 2019, GreenSky and its financial advisors solicited interest from potential acquirors for a sale of GreenSky. During the course of the process, 83 potential buyers were contacted and 34 parties (including an affiliate of GS Group) executed non-disclosure agreements and participated in the sales process that was being undertaken. Among the executed non-disclosure agreements, all contained standstill agreements, 32 of which had time periods that expired some time in 2020 and the remaining two of which expired upon GreenSky’s entry into a definitive merger agreement.

On September 24, 2019, the GreenSky board held an in-person meeting, with representatives of J.P. Morgan, FT Partners, Cravath and Troutman Pepper also in attendance. During the meeting, the GreenSky board discussed the status of the 2019 sale process and provided direction to senior management and to the financial and legal advisors with respect to that process, including the establishment of an initial bid deadline at the end of October 2019. Also during the meeting, the representatives of Cravath and Troutman Pepper again discussed with the GreenSky board legal considerations regarding the sale process, including matters related to a potential rollover if there were bids received that contemplated a rollover by Mr. Zalik (and potentially Mr. Sheft). The representatives of Cravath and Troutman Pepper reviewed the step of creating an independent special committee of properly empowered and properly advised independent directors to address any conflicts of interest that may be posed by such a rollover request, and also noted that any such special committee would need to be in place before GreenSky engaged in any substantive negotiations with any bidders contemplating a rollover. The GreenSky board noted the possibility that one or more bids may include a rollover request and that it would need to form a special committee in such circumstance. At the meeting, Mr. Zalik stated that he was abiding by the prior instructions from the GreenSky board not to engage in any discussions regarding rollover or similar arrangements with any participants in the process other than to indicate an openness to doing so.

On October 18, 2019, the GreenSky board met telephonically, together with members of senior management and representatives of J.P. Morgan, FT Partners, Cravath and Troutman Pepper to receive an update on the sale process to date. At this meeting, the GreenSky board discussed the tax receivable agreement and its potential financial impact on any potential acquisition transaction. The GreenSky board discussed that it would be important to understand what assumptions potential bidders would be making with respect to the tax receivable agreement, including providing bidders with information on the financial impact of the tax receivable agreement so that bidders could make fully informed bids, and so that the GreenSky board could evaluate bids comparably. In this discussion, the representatives of Cravath reviewed that tax receivable agreements had been treated in different ways in precedent transactions, and that the GreenSky board may be evaluating bids that proposed treating the tax receivable agreement differently. The financial and legal advisors reviewed with the GreenSky board that in situations where less than the full amount of the tax receivable agreement was paid out in a potential transaction more consideration would be potentially available to be paid to GreenSky’s public stockholders. In light of the fact that all members of the GreenSky board other than Mr. Arthur Bacci had direct or indirect financial interests in the tax receivable agreement, the GreenSky board discussed that it would be necessary that only Mr. Bacci have authority to make decisions, on behalf of the GreenSky board, regarding the tax receivable agreement going forward, including seeking consent from the tax receivable agreement beneficiaries to effect any reduction of consideration payable to the tax receivable agreement beneficiaries, with the goal of seeking to increase the consideration that would potentially be paid to GreenSky’s public stockholders.

On October 31, 2019, GreenSky received four written non-binding proposals to acquire GreenSky, three from financial sponsors (which we refer to as “Financial Sponsor A” “Financial Sponsor B” and “Financial Sponsor C,” as applicable) and one from GS Group. Also on that date, GreenSky received one proposal from a financial sponsor to provide financing for a potential acquisition should another party be interested in acquiring GreenSky, as well as a verbal proposal from a strategic acquiror.

 

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On November 6, 2019, the GreenSky board met telephonically, together with members of senior management and representatives of J.P. Morgan, FT Partners, Cravath and Troutman Pepper, to review the proposals that had been received. The proposal from GS Group provided for an all-cash acquisition of GreenSky at a range of $9.00 to $10.00 per share of GreenSky Class A common stock. The proposal from GS Group did not include any assumptions regarding the treatment of the tax receivable agreement. However, the representatives of J.P. Morgan stated that representatives of GS Group verbally had indicated that GS Group was assuming that the tax receivable agreement would be accelerated and paid out in a transaction, but that GS Group had not provided any information as to whether it had ascribed or assumed any specific value with respect to such acceleration payment. The written proposals from the three financial sponsors were as follows: a proposal from Financial Sponsor A of $10.00 in cash per share of GreenSky Class A common stock, assuming a full payment of the tax receivable agreement in connection with a transaction; a proposal from Financial Sponsor B of $8.25 in cash per share of GreenSky Class A common stock, without specifying any assumptions regarding the tax receivable agreement; and a proposal from Financial Sponsor C of $8.00 in cash per share of GreenSky Class A common stock, assuming a partial payment of the tax receivable agreement to some tax receivable agreement beneficiaries and a forfeiture of the tax receivable agreement payments by those tax receivable agreement beneficiaries that participated in a rollover in the transaction. The representatives of J.P. Morgan also reviewed that the verbal indication from the strategic party that had not provided a written proposal was at a range of $5.60 to $6.70 in cash per share of GreenSky Class A common stock, assuming that the tax receivable agreement was paid out in full in connection with a transaction. The representatives of J.P. Morgan also reported that Financial Sponsor B had stated that it could not execute on a transaction by itself and would need to identify one or more partners to be able to do so.

The GreenSky board discussed the proposals and decided to advance GS Group, Financial Sponsor A and Financial Sponsor C to the next round of the process. The GreenSky board determined not to continue discussions with (i) Financial Sponsor B, taking note of its inability to execute on a transaction by itself, (ii) the financial sponsor that had proposed acting as a financing source or (iii) the strategic party that had provided the verbal indication at $5.60 to $6.70 per share of GreenSky Class A common stock, in order to focus on the three bidders that had put forth the most firm proposals.

Mr. Zalik then proposed that the GreenSky board consider, in light of its prior discussions, whether to formally establish a special committee of independent directors. The representatives of Cravath reviewed with the GreenSky board that the purpose of the special committee would be to protect the interests of GreenSky’s unaffiliated stockholders against any potential conflicts of interest that could arise with respect to the controlling stockholder of GreenSky and any other members of the GreenSky board regarding equity rollover in a potential transaction. The representatives of Cravath also stated that the special committee should delegate authority to a sub-committee comprised solely of Mr. Bacci to consider, evaluate and recommend a course of action to the GreenSky board with respect to the treatment of the tax receivable agreement in any potential acquisition of GreenSky. The GreenSky board then authorized and created a special committee (which we refer to as the “GreenSky 2019 special committee”) consisting of four directors of the GreenSky board who would not participate in any rollover in connection with a transaction and were not otherwise members of management (thereby excluding Mr. Zalik, Mr. Sheft and Mr. Gerry Benjamin, who served as the Vice Chairman of the GreenSky board and the Chief Administrative Officer of GreenSky) with full authority to review, consider, evaluate, negotiate, accept, reject and recommend any potential transaction in which one or more officers, directors or other affiliates of GreenSky, including Mr. Zalik, may have an interest that would be additional to and/or different from the interests of GreenSky’s unaffiliated stockholders. The GreenSky board also authorized the GreenSky 2019 special committee to create a sub-committee comprised solely of Mr. Bacci to address matters related to the tax receivable agreement.

On November 25, 2019, the GreenSky board held a telephonic meeting, with members of senior management and representatives of J.P. Morgan, FT Partners, Cravath and Troutman Pepper also in attendance. During the meeting, representatives of Cravath reviewed the terms of a draft merger agreement that would be provided to the bidders in the next round of the sale process. The representatives of Cravath reviewed that the

 

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draft merger agreement, consistent with the GreenSky charter and the direction of the GreenSky board and Mr. Zalik, provided for equal treatment of the shares of GreenSky Class A common stock and the Common Units of GreenSky Holdings (each of which Common Units was represented by a share of GreenSky Class B common stock). The representatives of Cravath also reviewed that the draft merger agreement contained a “majority of the minority” closing condition, but did so in a way that reflected that such a condition may be appropriate only for some bidders (e.g., the bidders that required a rollover of all or a portion of Mr. Zalik’s equity). During the discussion, the GreenSky board agreed that the “majority of minority” vote condition should be included in the draft merger agreement so that it could be implemented if necessary. Mr. Zalik expressed his view that he also was agreeing to this condition in his capacity as the controlling stockholder of GreenSky, noting that he wanted this condition to be in place before any negotiations with financial sponsor bidders took place with respect to price or rollover terms. The representatives of Cravath also discussed that such a condition might also be warranted depending upon how the tax receivable agreement was treated in a particular transaction, noting again that all members of the GreenSky board other than Mr. Bacci had economic interests in the tax receivable agreement.

The GreenSky board discussed the treatment of the tax receivable agreement in the draft merger agreement, including a discussion with the financial and legal advisors that different bidders may approach the tax receivable agreement differently. The representatives of Cravath again reviewed how tax receivable agreements had been treated in different ways in different precedent transactions, noting that mathematically any reduction in the value of tax receivable agreement payments made under a tax receivable agreement in a sale transaction should inure to the benefit of the relevant company’s public stockholders. The representatives of Cravath discussed that the draft merger agreement was silent as to the treatment of the tax receivable agreement, thereby allowing bidders to make a proposal on how to treat the tax receivable agreement. The representatives of Cravath noted that the GreenSky 2019 special committee had created a sub-committee consisting solely of Mr. Bacci and that the sub-committee had been delegated full authority of the GreenSky board to consider, evaluate and recommend a course of action to the GreenSky board with respect to any proposed treatment (or recommended change in any proposed treatment) of the tax receivable agreement in a potential transaction. The representatives of Cravath discussed the benefits of having both the sub-committee of Mr. Bacci and the “majority of the minority” closing condition in the draft merger agreement to address different scenarios that might play out with respect to the tax receivable agreement based upon the bidder proposals.

The representatives of Cravath also noted that the draft merger agreement contemplated that Mr. Zalik would deliver a voting agreement in support of the transaction, noting that buyers would expect such a commitment. Mr. Zalik stated to the GreenSky board that if the GreenSky board and the GreenSky 2019 special committee agreed to proceed with a transaction and the transaction was otherwise satisfactory to him, he would be willing to enter into a voting agreement.

The representatives of Cravath reviewed the other key terms and conditions of the draft merger agreement and received feedback with respect thereto. Following the meeting, the representatives of Cravath worked with the members of the Compensation Committee of the GreenSky board to reflect the Compensation Committee’s views on various compensation and benefits terms addressed in the draft merger agreement relating to the treatment of GreenSky’s employees.

The representatives of J.P. Morgan and FT Partners reported that GS Group, Financial Sponsor A and Financial Sponsor C had each provided feedback that they were not likely to complete their due diligence in advance of the bid deadline of December 9, 2019, that GS Group seemed to be working the hardest towards getting to a transaction, and that the activity level of each of Financial Sponsor A and Financial Sponsor C was not the same as that of GS Group. In subsequent communications in late November 2019, the GreenSky board determined, following consultation with its financial and legal advisors, that the bid deadline should be extended to December 16, 2019 to provide all three parties with additional time.

On November 27, 2019, representatives of J.P. Morgan communicated to GS Group, Financial Sponsor A and Financial Sponsor C that the bid deadline was being extended to December 16, 2019. Additionally, a draft

 

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merger agreement was provided to each of GS Group, Financial Sponsor A and Financial Sponsor C. At this time, Financial Sponsor C declined to proceed further in the sale process.

On December 6, 2019, representatives of GS Group contacted representatives of J.P. Morgan to request a meeting with Mr. Zalik to discuss potential post-closing employment of Mr. Zalik by GS Group. During the conversation, the representatives of GS Group stated that GS Group would insist that Mr. Zalik continue to run GreenSky as part of GS Group for approximately two years post-closing and that the purpose of the meeting would be to understand whether Mr. Zalik would be willing to consider such employment as a condition of the overall transaction. In response, the representatives of J.P. Morgan communicated this request to the GreenSky board, stating that such a meeting, if authorized by the GreenSky board, could potentially occur on December 12, 2019. Following discussion, the GreenSky board authorized Mr. Zalik to meet with representatives of GS Group, subject to the same parameters as previously approved by the GreenSky board with respect to any financial sponsor inquiries as to Mr. Zalik’s willingness to engage in a rollover and, in particular that Mr. Zalik was not to discuss any specific economic or compensation terms with GS Group unless and until authorized to do so by the GreenSky board.

On December 7, 2019, a representative of Financial Sponsor A contacted a representative of J.P. Morgan and stated that it would not be submitting a written proposal, explaining that its view of fundamental value was lower than the closing price of $6.97 per share of GreenSky Class A common stock on December 6, 2019. The representative of Financial Sponsor A expressed an interest in a minority equity or preferred stock investment in GreenSky, should GreenSky ultimately choose to remain a public company and have a need for primary capital.

On December 9, 2019, representatives of GS Group sent to representatives of J.P. Morgan a revised draft of the merger agreement (which is referred to in this section of the proxy statement/prospectus entitled “—Background of the Transactions” as the “GS Group merger agreement”), which was prepared by Sullivan & Cromwell LLP (which we refer to as “S&C”), outside counsel to GS Group. Revised drafts were exchanged between Cravath and S&C during December 2019.

During the course of December 2019, members of GreenSky management discussed that it would be important that GS Group, were it to enter into an agreement to acquire GreenSky, also provide a backstop loan participation purchase facility (which we refer to as the “backstop funding facility”) in the event that post-signing one or more of GreenSky’s bank partners were to cease providing funding for loans originated through the GreenSky program in light of GreenSky ultimately becoming a part of GS Group, and GS Group potentially utilizing its own balance sheet (and not the bank partners) for funding loans originated through the GreenSky program on a post-acquisition basis. GreenSky communicated to GS Group that the purpose of the backstop funding facility would be to provide additional funding for loans originated through the GreenSky program during the period between signing a merger agreement and closing the transaction and, in the event that the transaction did not close, for a period of time after the merger agreement was terminated.

On December 12, 2019, Mr. Zalik and a representative of J.P. Morgan met with representatives of GS Group for the purpose previously discussed with the GreenSky board.

During mid to late December, representatives of Cravath and S&C discussed key items in revised drafts of the GS Group merger agreement. In that discussion, the representatives of S&C inquired as to the inclusion in the draft GS Group merger agreement of a “majority of the minority” closing condition. The representatives of Cravath explained that both the GreenSky board and Mr. Zalik were of the view that if any bidder in the process proposed any differential treatment with respect to Mr. Zalik such that he would be construed as receiving beneficial differential consideration, the transaction must be conditioned upon a non-waivable “majority of the minority” closing condition. The representatives of Cravath also stated that, in addition, the treatment of the tax receivable agreement might also justify the same closing condition, of which condition both the GreenSky board and Mr. Zalik were also supportive.

 

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The revised draft GS Group merger agreement included a requirement introduced by GS Group whereby Mr. Zalik and other pre-IPO investors would be required to subject an agreed-upon portion of their transaction proceeds to an escrow to indemnify GS Group against a number of diligence items, as well as a requirement for Mr. Zalik to subject an additional portion of his transaction proceeds to a retention holdback such that Mr. Zalik would only be entitled to those proceeds if he stayed employed by GS Group for a to-be-agreed-upon period of service.

On December 14, 2019, representatives of GS Group contacted a representative of J.P. Morgan and stated that GS Group would not be submitting a written proposal on the bid deadline of December 16, 2019, and instead stated that despite its initial indication of interest of $9.00 to $10.00 per share of GreenSky Class A common stock, GS Group was not prepared to submit a final written offer at a price higher than $7.00 per share of GreenSky Class A common stock, which price assumed the tax receivable agreement would be paid out in full in connection with a transaction. The representatives of GS Group indicated a continued interest in an acquisition of GreenSky and desire to continue due diligence. The representative of J.P. Morgan responded that GreenSky would likely expect GS Group to improve upon that price.

On December 19, 2019, GreenSky issued a press release related to its ongoing efforts to strengthen and diversify its funding commitments. GreenSky’s common stock closed at $8.57 per share that day.

On December 20, 2019, representatives of GS Group contacted representatives of J.P. Morgan and stated that it would be standing down from a potential transaction on account of the difference between the trading price of GreenSky Class A common stock and their fundamental view of value. J.P. Morgan informed GreenSky of GS Group’s message.

On December 23, 2019, at the direction of GreenSky senior management, a representative of J.P. Morgan contacted representatives of GS Group to confirm that they would be interested in continuing to pursue a potential transaction. The representative of J.P. Morgan communicated that Mr. Zalik had indicated that he, in his personal capacity as a tax receivable agreement beneficiary, would potentially be willing to support amending the tax receivable agreement to extinguish any payments due upon a change of control transaction with GS Group in order to obtain the best price for GreenSky’s public stockholders, even if it meant doing so would significantly reduce the proceeds Mr. Zalik otherwise would have received in a transaction. These payments, which would become contractually due to the tax receivable agreement beneficiaries, totaled approximately $330 million at GS Group’s offer price of $7.00 per share of GreenSky Class A common stock. The representative of J.P. Morgan further observed that extinguishing these payments should enable GS Group to increase the total consideration offered to GreenSky’s public stockholders by at least the same approximately $330 million amount, which was equivalent to approximately $1.80 on a per-share basis.

On December 27, 2019, representatives of GS Group contacted a representative of J.P. Morgan to note that while amending the tax receivable agreement would inure to the benefit of GreenSky’s public stockholders, GS Group was not prepared to increase the total consideration to be paid in a potential transaction. J.P. Morgan informed GreenSky of GS Group’s message.

On December 30, 2019, Mr. Zalik spoke with Mr. David Solomon, Chairman and Chief Executive Officer of GS Group. Mr. Zalik reiterated the strategic and financial benefits of the potential transaction to both firms, but he stated that GS Group needed to deliver more value.

On January 15, 2020, representatives of GS Group contacted representatives of J.P. Morgan and stated that GS Group was still having difficulty raising its bid, but they wanted to meet in person to discuss further.

On January 17, 2020, the GreenSky board held a telephonic meeting, with members of senior management and representatives of J.P. Morgan, FT Partners, Cravath and Troutman Pepper also in attendance. Mr. Zalik updated the GreenSky board on the recent discussions with GS Group, including the request for an in-person

 

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meeting to discuss further. Mr. Zalik stated that he believed such a meeting could be beneficial, and would allow GreenSky management to discuss with GS Group various initiatives that might allow GS Group to find more value and increase its proposed purchase price. The GreenSky board endorsed holding the meeting.

During the meeting, the representatives of Cravath reviewed with the GreenSky board their discussions with representatives of S&C regarding the GS Group merger agreement, noting that there were still a large number of material open issues in the GS Group merger agreement. Members of GreenSky senior management also discussed the need for GS Group to provide a backstop funding facility, which had been communicated to GS Group. Following discussion, the GreenSky board authorized J.P. Morgan to inform GS Group that the GreenSky board was supportive of having an in-person meeting to continue to discuss a transaction, but was not supportive of a transaction at GS Group’s then-current bid, to communicate GreenSky’s positions on various issues arising from the GS merger agreement and to request that GS Group provide an update on any remaining diligence items, an understanding of GS Group’s view on providing a backstop funding facility, an understanding of GS Group’s potential timeline to signing a transaction and additional information on the proposed terms of a retention holdback for Mr. Zalik.

Later that day, at the direction of the GreenSky board, representatives of J.P. Morgan contacted representatives of GS Group and discussed the topics that the GreenSky board had previously authorized J.P. Morgan to communicate to GS Group.

Over the next several days, representatives of J.P. Morgan and GS Group continued to discuss these items and scheduled an in-person meeting in Atlanta for January 30, 2020.

On January 30, 2020, representatives of GS Group met with representatives of GreenSky, including Mr. Zalik, at J.P. Morgan’s Atlanta offices, with a representative of J.P. Morgan also in attendance. At the meeting, the parties discussed GreenSky’s business and various initiatives that GreenSky was undertaking and how those initiatives might positively impact GreenSky’s outlook. Representatives of GS Group also reviewed proposed terms of a backstop funding facility, its outstanding due diligence items and the proposed terms of the retention holdback for Mr. Zalik, which contemplated that Mr. Zalik agree that GS Group withhold $200 million of his transaction proceeds for a two-year period, with all amounts paid to Mr. Zalik only if he remained employed at GS Group for the entire three-year period. The terms also proposed a $100 million incentive payment to Mr. Zalik based upon criteria such as merchant retention, originations and growth. Mr. Zalik rejected the $100 million incentive payment at the meeting, stating that he was not willing to accept any additional or differential consideration from that of GreenSky’s public stockholders, and that while subjecting $200 million of his proceeds to a retention holdback would put him at a significant economic disadvantage to GreenSky’s public stockholders, he might be willing to do so in order to facilitate a beneficial transaction for GreenSky’s public stockholders. However, Mr. Zalik emphasized that he was not going to accept any differential treatment that benefited or advantaged him relative to GreenSky’s public stockholders. At the meeting, the representatives of GS Group continued to insist upon a $100 million indemnity escrow to be funded with transaction proceeds of Mr. Zalik and the other pre-IPO investors for various diligence items. The representatives of GS Group stated that GS Group was prepared to work toward completion of its due diligence and announcement of a transaction in February 2020.

On January 31, 2020, the GreenSky board met telephonically, with members of senior management and representatives of J.P. Morgan, FT Partners, Cravath and Troutman Pepper also in attendance. Mr. Zalik provided a recap of the meeting that had occurred the prior day, including his rejection of the $100 million incentive payment that was offered to him by GS Group as part of his retention holdback. The GreenSky board discussed with senior management the possibility of GS Group increasing its price, and the work that would need to be done to be able to finalize transaction documentation, including the backstop funding facility. The GreenSky board concluded that it would be most productive to advance due diligence and transaction documentation with GS Group and then push GS Group on valuation when a transaction was more achievable in the near term.

 

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The GreenSky board also discussed whether or not to re-engage with any of the other parties that had signed non-disclosure agreements in 2019, and Mr. Zalik expressed his view that GreenSky should focus on strategic acquirors with captive funding sources in light of GreenSky’s funding needs. Representatives of J.P. Morgan noted that J.P. Morgan had contacted nearly two dozen banks as part of the 2019 process and that only four signed non-disclosure agreements other than GS Group. The GreenSky board reviewed those four parties and the feedback that they had given during the process and concluded that it was not likely that any of those four would be interested in pursuing a transaction at a price higher than that being contemplated by GS Group or at all. The GreenSky board also discussed possibly contacting Financial Sponsor A and Financial Sponsor C, but noted that each of those parties had withdrawn from the process in December 2019 without completing substantial due diligence despite being moved forward in the process. After discussion, the GreenSky board concluded that GreenSky should continue to work with GS Group given its continued interest in a potential transaction and the feedback that had been received by other parties in 2019 in the sale process.

On February 4, 2020, a representative of GS Group contacted a representative of J.P. Morgan to update J.P. Morgan on the work GS Group was undertaking internally to provide a revised proposal.

On February 5, 2020, Cravath sent to S&C a revised draft of the GS Group merger agreement, which rejected the concept of an indemnity escrow and otherwise reflected feedback from prior discussions with the GreenSky board and senior management.

On February 6, 2020, the GreenSky board held a regularly scheduled in person meeting. During the meeting, Mr. Zalik provided an update to the GreenSky board regarding the ongoing discussions with GS Group.

Over the next week, GreenSky and GS Group and their respective advisors engaged in discussions regarding due diligence items and transaction documentation, including various initiatives that GreenSky was undertaking and how those initiatives might positively impact GreenSky’s outlook.

On February 10, 2020, representatives of GS Group contacted representatives of J.P. Morgan to indicate that, despite their renewed due diligence efforts, GS Group was not prepared to raise its bid, and was unwilling to withdraw its request for a $100 million indemnity escrow from Mr. Zalik and other pre-IPO investors.

On February 12, 2020, a representative of GreenSky, a representative of GS Group and a representative of J.P. Morgan met in GS Group’s offices in New York to continue discussing the benefits of the potential transaction and potential paths to resolving the open transaction structure and diligence items. Subsequently, on February 20, 2020, a representative of GS Group contacted a representative of J.P. Morgan to indicate GS Group’s desire to continue discussions regarding a potential transaction following GreenSky’s release of its 2019 financial results, scheduled for March 2, 2020.

In early March, following GreenSky’s release of its 2019 financial results, representatives of GS Group contacted representatives of J.P. Morgan to discuss open due diligence requests and next steps in a potential transaction. However, as the COVID-19 pandemic progressed, representatives of GS Group advised Mr. Zalik, Mr. Benjamin and representatives of J.P. Morgan that GS Group wanted to cease merger discussions.

On May 1, 2020, the GreenSky board held a regularly scheduled telephonic meeting. During the meeting, Mr. Benjamin provided an update to the GreenSky board with respect to GreenSky’s strategic alternatives review process, noting that GreenSky’s Q1 earnings release would disclose that GreenSky expects to make an announcement regarding the outcome of the process no later than when GreenSky reports its Q2 financial results.

On July 20, 2020, the GreenSky board held a regularly scheduled telephonic meeting. During the meeting, Mr. Benjamin provided an update to the GreenSky board with respect to GreenSky’s strategic alternatives review process, confirming with the GreenSky board that GreenSky would announce the conclusion of the process in its Q2 earnings release unless a viable bidder emerged prior to the issuance of the release on August 10, 2020.

 

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On August 10, 2020, GreenSky publicly announced that it had brought to a close its strategic alternatives review process.

After discussions regarding a potential transaction ceased, representatives of GreenSky and GS Group remained in periodic contact with respect to commercial matters unrelated to a potential acquisition of GreenSky. In particular, in September 2020, an affiliate of GS Group provided financing for a third party’s acquisition of participations in consumer finance loans originated through the GreenSky program, and in October 2020 and May 2021, an affiliate of GS Group acquired participations in consumer finance loans originated through the GreenSky program (with the GS Group affiliate securitizing the participations that it acquired in August 2021). Each of these transactions occurred in the ordinary course of business and unrelated to a potential acquisition transaction. During the course of these periodic contacts, including periodic outreach by Mr. Solomon to Mr. Zalik, representatives of GS Group expressed their view that an acquisition of GreenSky was still of interest to GS Group at the appropriate time.

On May 29, 2021, at the request of GS Group, Mr. Solomon and Mr. Zalik met to discuss the market landscape, GS Group and GreenSky. During this discussion, Mr. Solomon expressed GS Group’s interest in restarting discussions regarding a potential acquisition of GreenSky. During the meeting, and in a subsequent discussion with Ms. Stephanie Cohen, Global Co-Head of Consumer and Wealth Management of GS Group, Mr. Zalik indicated that he continued to believe GreenSky and GS Group’s consumer businesses were good partners for each other and that the GreenSky board would be interested in additional opportunities to create stockholder value. Mr. Zalik further noted that GreenSky was demonstrating solid financial performance and expected to raise its outlook for fiscal year 2021 profitability when it next reported earnings. Mr. Zalik suggested that GS Group work with representatives of J.P. Morgan to obtain updated due diligence information so that GS Group could make an informed acquisition proposal to the GreenSky board. Subsequently, Mr. Zalik informed the GreenSky board of GS Group’s renewed interested in a potential acquisition of GreenSky.

On June 16, 2021, representatives of Cravath and S&C negotiated an extension of the non-disclosure agreement that GreenSky and GS Group previously had entered into in connection with their prior discussions. Thereafter, representatives of GreenSky provided representatives of GS Group with certain updated due diligence information, including GreenSky’s perspective on demand for home improvement products and services and related financing, the ongoing positive impact of GreenSky’s investments in its consumer credit and merchant risk underwriting capabilities, and GreenSky’s then-current expectations for 2021, so that GS Group could evaluate whether to make a new proposal for an acquisition of GreenSky.

On July 2, 2021, GS Group delivered a written proposal to acquire GreenSky through an all-stock transaction at an exchange ratio of 0.02 GS Group shares for each share of GreenSky Class A common stock, which represented a price of approximately $7.50 per share of GreenSky Class A common stock based upon the closing trading price per share of GS Group common stock on July 1, 2021. GS Group’s proposal required that no payments be made under the tax receivable agreement in connection with the transaction, that $50 million worth of the merger consideration payable to the pre-IPO holders be held in escrow for three years to satisfy potential indemnity claims against contingent liabilities, and that $200 million of Mr. Zalik’s proceeds from the transaction be held back and released upon completion of two years of service at GS Group. The proposal was further contingent upon satisfactory resolution of a previously disclosed investigation of GreenSky by the Consumer Financial Protection Bureau (which we refer to as the “CFPB”). The proposal did not reference whether GS Group was still willing to provide a backstop funding facility. Mr. Zalik circulated the proposal to the members of the GreenSky board following receipt.

Following receipt of the proposal, and following discussions and a consensus among GreenSky board members, at the direction of the GreenSky board, representatives of GreenSky and J.P. Morgan informed representatives of GS Group, including Mr. Zalik to Mr. Solomon, that GS Group’s proposal was not sufficient for GreenSky to engage in further discussions. Subsequently, on July 9, 2021, Mr. Solomon informed Mr. Zalik that GS Group was working on a revised proposal at a higher per-share value.

 

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On July 12, 2021, GreenSky entered into a consent order with the CFPB.

On July 14, 2021, representatives of Cravath and S&C had a telephone conversation regarding the July 2, 2021 written proposal submitted by GS Group. During that conversation, the representatives of S&C stated that they were working on a revised draft of the GS Group merger agreement in the event GS Group and GreenSky proceeded towards signing a definitive agreement. In that connection, the representatives of S&C inquired about the “majority of the minority” closing condition previously included in the draft GS Group merger agreement, to which the representative of Cravath reiterated that such condition was included at the direction of the GreenSky board, with the concurrence of Mr. Zalik, in the event that a buyer proposed a transaction that provided for beneficial differential consideration for Mr. Zalik. The representatives of S&C and Cravath discussed that the terms of the GS Group proposal were, in fact, detrimental to Mr. Zalik relative to the public stockholders of GreenSky because the GS Group proposal (i) required Mr. Zalik to subject $200 million in proceeds to a retention holdback arrangement and (ii) required that no payments be made under the tax receivable agreement, which would result in Mr. Zalik ultimately forfeiting significant value that he would otherwise be entitled to under the tax receivable agreement based on the proposed purchase price. The representatives of S&C inquired as to whether Mr. Zalik was also refusing to accept any additional incentive or other compensation in exchange for the $200 million retention holdback (such as the $100 million incentive that GS Group previously had proposed). The representative of Cravath stated that Mr. Zalik would not accept any such beneficial treatment, and instead would only require employment terms and conditions of a similarly situated GS Group employee, which the representative of Cravath stated put Mr. Zalik in a worse position relative to GreenSky’s public stockholders taking into account the other terms being imposed upon him. Following that discussion, the representatives of S&C stated that they did not intend to include the “majority of the minority” voting condition in the revised draft merger agreement.

On July 15, 2021, GS Group delivered a revised written proposal pursuant to which it increased the proposed exchange ratio to 0.024 shares of GS Group common stock for each share of GreenSky Class A common stock, which represented a price of $9.00 per share of GreenSky Class A common stock based upon the trading closing price per share of GS Group common stock on July 14, 2021. The proposal still required that no payments be made under the tax receivable agreement and otherwise contained terms consistent with what was reflected in the July 2, 2021 proposal, except that GS Group stated that it would be willing to implement a backstop funding facility to purchase eligible consumer loans originated as part of the GreenSky program.

On July 18, 2021, the GreenSky board met telephonically, with members of senior management and representatives of J.P. Morgan, Cravath and Troutman Pepper also in attendance, to discuss the latest developments in the discussions with GS Group, including its July 15, 2021 proposal. The representatives of Cravath again reviewed with the GreenSky board their fiduciary duties under Delaware law generally, as well as in the context of considering a potential sale of GreenSky. The representatives of J.P. Morgan reviewed the 2019-2020 process relating to a potential sale of GreenSky, including the discussions with GS Group at that time, and GS Group’s renewed interest in acquiring GreenSky subsequent to those discussions. The financial and legal advisors reviewed the key terms of GS Group’s July 15, 2021 proposal. Mr. Zalik reiterated that he would be willing to agree to the retention holdback requested by GS Group if that would facilitate a transaction with GS Group, even though it would disadvantage him relative to GreenSky’s public stockholders, and that he would not seek any special compensation from GS Group for agreeing to do so. The financial and legal advisors also reviewed with the GreenSky board considerations relating to GS Group offering an all-stock transaction. The representatives of Cravath and J.P. Morgan then discussed with the GreenSky board GS Group’s request for an indemnity escrow, the terms of the tax receivable agreement and GS Group’s request that the tax receivable agreement be amended to relinquish all payments. Following this discussion, Mr. Zalik stated that he would support amending the tax receivable agreement to extinguish any payments due upon a change of control transaction with GS Group in order to obtain the best price for GreenSky stockholders, even if it meant he would be surrendering material consideration to which he would otherwise be entitled.

Thereafter, the GreenSky board discussed whether J.P. Morgan should contact other potentially interested parties were the GreenSky board to continue discussions with GS Group. J.P. Morgan reviewed the various

 

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counterparties that could potentially be interested in engaging in discussions, but noted that most had been contacted during the 2019-2020 process and had not contacted GreenSky since then despite GreenSky having publicly pursued a sales process at that time. The GreenSky board then discussed the list of potential counterparties, and Mr. Sheft suggested that a financial sponsor (which we refer to as “Financial Sponsor D”) should be contacted were GreenSky to continue discussions with GS Group in light of that financial sponsor’s prior investments in the financial institutions space. The GreenSky board decided to adjourn the meeting and reconsider the situation further at a subsequent meeting.

Following the meeting, Mr. Sheft reached out to a representative of Financial Sponsor D with whom he had a pre-existing relationship and told the representative that if Financial Sponsor D were interested in potentially pursuing a transaction, that now might be the right time to do so. Mr. Sheft stated that if Financial Sponsor D were interested, Mr. Sheft would have the relevant representative of J.P. Morgan contact the appropriate representatives of Financial Sponsor D. The representative of Financial Sponsor D stated that he believed Financial Sponsor D would be interested, and asked Mr. Sheft to have J.P. Morgan make contact.

On July 19, 2021, the GreenSky board met telephonically, with a member of senior management and a representative of J.P. Morgan also in attendance. After discussing GS Group’s July 15, 2021 proposal, the members of the GreenSky board who were present at the meeting authorized GreenSky’s management and advisors to continue discussions with GS Group and agreed to confirm with members of the GreenSky board not in attendance that they were supportive of such endorsement, which was done following the meeting. Mr. Sheft reported to the GreenSky board his contact with the representative of Financial Sponsor D, and the GreenSky board instructed the representative of J.P. Morgan to contact Financial Sponsor D to arrange for the execution of a customary non-disclosure agreement and the provision of preliminary information regarding GreenSky. In particular, the GreenSky board noted that introducing competition would be beneficial to the process. Mr. Zalik stated that, consistent with the GreenSky board’s guidance, he would contact Mr. Solomon and tell him that $9.00 per share was insufficient.

Later on July 19, 2021, Mr. Zalik contacted Mr. Solomon and delivered the GreenSky board’s guidance. On July 19, 2021, representatives of J.P. Morgan also contacted representatives of Financial Sponsor D to inquire whether Financial Sponsor D would be interested in submitting a bid to acquire GreenSky and the representatives of Financial Sponsor D indicated that Financial Sponsor D would be interested in doing so.

Also on July 19, 2021, at the direction of the GreenSky board, representatives of J.P. Morgan contacted representatives of GS Group to indicate, among other things, that a price per share significantly above $9.00 per share of GreenSky Class A common stock would be required if the condition that no payments be made under the tax receivable agreement in connection with the transaction were to be included and also that GreenSky was not willing to accept an indemnity escrow as a condition.

On July 20, 2021, GreenSky and Financial Sponsor D executed a non-disclosure agreement, which contained a customary “standstill” provision that would expire were GreenSky to enter into a transaction to sell itself to a third party. Financial Sponsor D subsequently began its due diligence review of GreenSky and its business.

On July 21, 2021, representatives of Financial Sponsor D had a videoconference meeting with Mr. Zalik and Mr. Sheft, with a representative from J.P. Morgan also in attendance, to discuss GreenSky’s business.

On July 22, 2021, Financial Sponsor D delivered a written proposal to acquire GreenSky in an all-cash transaction at a valuation of $9.50 per share of GreenSky Class A common stock. The proposal assumed that any payments due under the tax receivable agreement in connection with the transaction would be extinguished in respect of a change of control acquisition of GreenSky. The proposal also indicated that it would not be dependent on third-party financing and it included a request for exclusivity. Mr. Zalik circulated the proposal to the members of the GreenSky board following receipt.

On July 23, 2021, the GreenSky board met telephonically, with members of senior management and representatives of J.P. Morgan, Cravath and Troutman Pepper also in attendance, to discuss the latest

 

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developments in GreenSky’s discussions with GS Group and Financial Sponsor D. Prior to the representatives of J.P. Morgan joining the meeting, the representatives of Cravath reviewed with the GreenSky board a letter disclosing J.P. Morgan’s relationships with GreenSky, GS Group and Financial Sponsor D, and the GreenSky board concluded that in light of J.P. Morgan’s several year history in working with GreenSky, it did not believe that any of these relationships would impair J.P. Morgan acting as GreenSky’s financial advisor in connection with the discussions with GS Group and Financial Sponsor D. The representatives of J.P. Morgan then joined the meeting. Mr. Andrew Kang, Executive Vice President and Chief Financial Officer of GreenSky, reviewed forecasts for GreenSky, as well as the assumptions underlying those forecasts. Those forecasts are described more fully under the section entitled “The Mergers—Certain Unaudited Financial Information” beginning on page 73 of this proxy statement/prospectus. The representatives of J.P. Morgan then reviewed their preliminary valuation analysis of GreenSky based on the forecasts and reviewed their recent discussions with representatives of GS Group and Financial Sponsor D.

Thereafter, the GreenSky board discussed Financial Sponsor D’s July 22, 2021 proposal and how it compared to GS Group’s July 15, 2021 proposal. The GreenSky board then discussed with its financial and legal advisors the potential timetables for GS Group and Financial Sponsor D to conduct their due diligence and reach an agreement on transaction terms. The representatives of J.P. Morgan noted that the representatives of Financial Sponsor D had indicated that Mr. Zalik’s continued involvement in GreenSky in some fashion following an acquisition was important.

The representatives of J.P. Morgan reviewed with the GreenSky board a list of potential additional parties that could be approached as potential acquirors of GreenSky and, given the number of potential counterparties that had already been contacted regarding a potential sale of GreenSky in 2019 and had not pursued a transaction with GreenSky, noted the potential benefit of limiting the number of potential counterparties to be contacted at this stage to those most likely to be interested in a transaction, including, among other reasons, to reduce the risk of information leaks, manage the limited bandwidth of GreenSky management to engage with multiple bidders and reduce the risk of losing either GS Group or Financial Sponsor D if a number of additional parties were introduced into the process. Following discussion, the GreenSky board determined it would be beneficial to contact a limited number of additional parties to solicit interest in engaging in discussions regarding a transaction, and to move forward in discussion with each of GS Group and Financial Sponsor D.

Mr. Zalik then noted that both GS Group and Financial Sponsor D had provided offers that were conditioned on the beneficiaries under the tax receivable agreement receiving no payments upon consummation of or following a transaction. Mr. Zalik stated that he had asked legal counsel to prepare an amendment to the tax receivable agreement to provide for that treatment, contingent upon a transaction being executed at a price equal to or greater than $9.00 per share of GreenSky Class A common stock. Mr. Zalik reiterated to the GreenSky board that he would be supportive of an amendment to the tax receivable agreement if that was the path to obtain the highest price for GreenSky stockholders, even if that was detrimental to him economically. The GreenSky board discussed the requisite tax receivable agreement beneficiary vote necessary to implement an amendment. Mr. Zalik and Mr. Sheft, the second largest beneficiary under the tax receivable agreement, agreed to discuss the tax receivable agreement amendment further in the coming days.

On July 26, 2021, at the direction of the GreenSky board, representatives of J.P. Morgan contacted representatives of Financial Sponsor D and informed them that GreenSky was interested in continuing discussions and providing access to due diligence information, but that a valuation of $9.50 per share of GreenSky Class A common stock was insufficient.

On July 27, 2021, holders of the requisite percentage of tax receivable agreement beneficiaries executed signature pages to the amendment to the tax receivable agreement, but several asked that their signatures not be added to the amendment unless and until a transaction was imminent. The amendment provided that if GreenSky consummated a sale transaction at a price equal to or greater than $9.00 per share of GreenSky Class A common stock pursuant to a definitive agreement entered into by October 21, 2021, then there would be no payments in respect of the tax receivable agreement upon consummation of or following such a transaction.

 

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On August 4, 2021, Mr. Solomon contacted Mr. Zalik to discuss the current state of GS Group’s interest in a potential acquisition of GreenSky and the timetable for reaching agreement on transaction terms. Mr. Solomon said that GS Group would not be in position to engage for several weeks given other matters occupying GS Group’s attention at that time. Mr. Zalik told Mr. Solomon that GS Group may have to re-engage on a more accelerated basis because there was another party interested in acquiring GreenSky.

On August 5, 2021, at the direction of the GreenSky board, representatives of J.P. Morgan contacted two other parties to solicit potential interest in a strategic transaction with GreenSky. One of such parties (which we refer to as “Strategic Party E”) had not been contacted during the 2019-2020 process and the other of such parties (which we refer to as “Strategic Party F”) had been contacted, but had not engaged in any meaningful discussion. Both parties indicated they might be interested in a potential transaction with GreenSky. Strategic Party E stated that it would only be able to pursue an all-stock transaction. Strategic Party F stated that it might be interested in pursuing a transaction and requested that a non-disclosure agreement be sent for its consideration.

On August 8, 2021, representatives of Financial Sponsor D contacted representatives of J.P. Morgan, stating that Financial Sponsor D wanted to preempt any process GreenSky might be running for a sale of the company. Representatives of J.P. Morgan informed Financial Sponsor D that they could not respond to that request, but that they believed GreenSky would be seeking an appropriate premium in a sale transaction and encouraged Financial Sponsor D to make the most compelling proposal that it could.

On August 10, 2021, representatives of Financial Sponsor D contacted representatives of J.P. Morgan and stated that Financial Sponsor D was prepared to increase the valuation of their proposal to acquire GreenSky to $10.50 per share of GreenSky Class A common stock in an all-cash transaction, assuming that any payments due under the tax receivable agreement in connection with the transaction would be extinguished in respect of a change of control acquisition of GreenSky.

On August 11, 2021, a representative of Cravath and Mr. Sheft discussed the nature of Mr. Sheft’s relationship with Financial Sponsor D. Based on those discussions, Mr. Sheft agreed to recuse himself from all GreenSky board and committee discussions going forward so long as Financial Sponsor D remained a potentially interested acquiror. Mr. Sheft also agreed that he would not engage in any further discussions with representatives of Financial Sponsor D regarding a potential transaction or engage with Financial Sponsor D regarding any rollover terms (were those to be proposed) unless and until authorized to do so by the GreenSky board.

On August 11, 2021, the GreenSky board (except for Mr. Sheft, who had recused himself) met by videoconference, with members of senior management and representatives of J.P. Morgan, Cravath and Troutman Pepper also in attendance. A representative of Cravath reviewed with the GreenSky board his discussions with Mr. Sheft regarding Mr. Sheft’s recusal. The representatives of J.P. Morgan reviewed with the GreenSky board the latest developments in their discussions with Financial Sponsor D, Mr. Zalik’s discussions with Mr. Solomon, the responses from Strategic Party E and Strategic Party F and other recent sale transactions that had been announced in the consumer finance sector. The representatives of J.P. Morgan reported that Strategic Party E had stated that it could complete a transaction only if most or all of the consideration would be in the form of stock, which would result in GreenSky stockholders holding a material stake in the combined company. The GreenSky board discussed Strategic Party E and its business, noting that they did not believe there was sufficient strategic merit or fit in a combination of the two companies that would cause the GreenSky board to recommend such a transaction to the GreenSky stockholders. Mr. Zalik confirmed that this was his view, that he did not see sufficient strategic merit in a combination and that he would not want to exchange his stock in GreenSky for stock in Strategic Party E. The GreenSky board then instructed J.P. Morgan to contact Strategic Party E and inform it that the GreenSky board was not supportive of an all-stock transaction with it and to inquire whether Strategic Party E would nonetheless be interested in continuing to explore a transaction. The GreenSky board also discussed Strategic Party F, and the GreenSky board authorized J.P. Morgan to send it a non-disclosure agreement.

 

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The GreenSky board then discussed the other potentially interested parties that had been discussed at prior meetings of the GreenSky board, and the representatives of J.P. Morgan expressed their view, which was shared by the GreenSky board, that they did not believe that any of those parties would likely be interested in pursuing a transaction with GreenSky on a reasonable timeline or at all. The GreenSky board discussed that GS Group and Financial Sponsor D were likely to be the parties that were the most interested in pursuing a transaction, and that it did not make sense to reach out to more parties. The GreenSky board noted that it had engaged in a public sale process in 2019-2020 and that only GS Group had submitted a proposal that was actionable at the time. The GreenSky board also noted that any other parties added to the process would need significant time to conduct due diligence, and that allowing them to do so would stress the bandwidth of management who had spent significant time already with GS Group and Financial Sponsor D and would have to continue doing so going forward. The GreenSky board also discussed the importance of not losing either the GS Group or the Financial Sponsor D proposals, and that expanding the process could risk doing so. The GreenSky board also discussed with representatives of Cravath the terms of the merger agreement that would allow the GreenSky board to respond to unsolicited proposals that surfaced after a merger agreement was signed. After considering all of these factors, the GreenSky board concluded that GreenSky should focus on GS Group and Financial Sponsor D, and Strategic Party F were it to engage, and try to reach a definitive agreement at the highest value without delay.

A representative of Cravath then reviewed with the GreenSky board what steps could be taken in the event Financial Sponsor D offered or required a rollover by Mr. Zalik (and potentially Mr. Sheft) and the legal principles that would be implicated. Based on these discussions, the GreenSky board concluded that the special committee should be reinstated on the same basis as it had been in 2019 (except there was no need for the tax receivable agreement sub-committee in light of the requirements from each of the active bidders that there be no tax receivable agreement payments). The representative of Cravath also reviewed the “majority of the minority” closing condition, and the GreenSky board, with Mr. Zalik concurring, determined that any transaction with Financial Sponsor D that included a rollover should be subject to both the special committee and “majority of the minority” procedural safeguards.

The GreenSky board then authorized the reconstitution of the special committee initially comprised of Mr. Babbit, Mr. Bacci and Mr. Freishtat, which committee we refer to as the “GreenSky special committee.” The GreenSky board authorized the GreenSky special committee to, among other things, review, consider, evaluate, negotiate, explore and, as appropriate, recommend to the GreenSky board for approval any possible strategic transaction outside the ordinary course of business in which one or more officers, directors or other affiliates of GreenSky may have an interest that is additional to and/or different from the interests of GreenSky’s unaffiliated stockholders, and resolved that the GreenSky board would not approve or recommend any such transaction for approval by GreenSky stockholders without a prior favorable recommendation by the GreenSky special committee. The GreenSky board also authorized the GreenSky special committee to retain, at GreenSky’s expense, its own legal, financial and other advisors.

On August 12, 2021, Mr. Zalik contacted Mr. Solomon to let him know that another party was advancing its interest in acquiring GreenSky, and that GS Group would need to reengage quickly if it was interested in pursuing an acquisition. Subsequently, on August 15, 2021, Mr. Solomon contacted Mr. Zalik and informed him that GS Group would restart its due diligence effort.

On August 16, 2021, representatives of Cravath provided a draft merger agreement (which is referred to in this section of the proxy statement/prospectus entitled “—Background of the Transactions” as the “Financial Sponsor D merger agreement”) to Financial Sponsor D, which draft merger agreement contained a “majority of the minority” vote condition.

On August 18, 2021, representatives of Financial Sponsor D met telephonically with representatives of J.P. Morgan to provide a verbal proposal to acquire GreenSky at a valuation of $10.75 per share of GreenSky Class A common stock.

 

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Also on August 18, 2021, representatives of GS Group held a series of due diligence meetings with representatives of GreenSky in Atlanta, including a dinner meeting with senior executives of both firms.

On August 21, 2021, representatives of Financial Sponsor D sent to representatives of Cravath and J.P. Morgan a revised draft of the Financial Sponsor D merger agreement, which was prepared by Financial Sponsor D’s outside counsel.

On August 23, 2021, at the direction of GreenSky’s senior management, representatives of J.P. Morgan contacted representatives of GS Group and Financial Sponsor D to request that each of GS Group and Financial Sponsor D provide updated written proposals to acquire GreenSky on September 3, 2021.

On August 23, 2021, Mr. Zalik and representatives of J.P. Morgan also had a telephonic meeting with representatives of Financial Sponsor D to discuss the financing plans associated with Financial Sponsor D’s potential acquisition of GreenSky and other matters. During that meeting, Financial Sponsor D stated that, as part of its financing plan, it would want both Messrs. Zalik and Sheft to roll over approximately $500 million (approximately $250 million each) of proceeds into the post-closing company. Mr. Zalik stated that he would not engage in a discussion on the rollover other than to note the request.

On August 23, 2021, the GreenSky special committee also met by videoconference, with representatives of Wilson Sonsini Goodrich & Rosati P.C. (which we refer to as “Wilson Sonsini”) also in attendance. The members of the GreenSky special committee conducted an interview of Wilson Sonsini to serve as independent legal advisor to the GreenSky special committee, and in response to questions from the GreenSky special committee, the representatives of Wilson Sonsini confirmed that Wilson Sonsini had no actual or potential conflicts of interest with respect to a proposed engagement. The representatives of Wilson Sonsini reviewed with the GreenSky special committee the members’ fiduciary duties, the role and mandate of the GreenSky special committee, standards of review that can apply to directors’ decisions under Delaware law and various process considerations. The members of the GreenSky special committee also discussed whether any of the members of the GreenSky special committee had any actual or potential conflicts of interest with respect to a potential acquisition of GreenSky, and all three members of the GreenSky special committee confirmed that they did not believe that any of their respective relationships would affect their judgment in connection with the GreenSky special committee’s process. However, Mr. Freishtat indicated that, pending further discussion with the special committee members and Wilson Sonsini, he would resign from the GreenSky special committee and advise the GreenSky board accordingly given his personal relationship with Mr. Zalik. The GreenSky special committee also discussed its potential engagement of a financial advisor and the importance of engaging a financial advisor that was appropriately qualified and free of conflicts of interest. After discussing the possibility of hiring other financial advisors, the GreenSky special committee noted its potential interest in engaging Piper Sandler given Piper Sandler’s familiarity with GreenSky and its industry, its ability to get up to speed quickly as a result and certain favorable experiences that certain members of the GreenSky special committee had had with the proposed Piper Sandler team on matters unrelated to GreenSky.

Following the meeting, the GreenSky special committee determined to engage Wilson Sonsini as its independent legal advisor, and Mr. Freishtat resigned from the GreenSky special committee on August 24, 2021.

On August 25, 2021, representatives of S&C sent to representatives of Cravath a revised draft of the GS Group merger agreement. Between August 25, 2021 and September 14, 2021, representatives of Cravath and representatives of S&C engaged in negotiations of the terms of the GS Group merger agreement. During this time and leading up to the signing of the GS Group merger agreement, representatives of Wilson Sonsini, acting at the direction of the GreenSky special committee, provided feedback on the GS Group merger agreement to representatives of Cravath but did not directly participate in negotiations with S&C given that the GS Group proposal did not involve a conflict of interest and on the basis that it could be detrimental to negotiations with GS Group if GS Group or its advisors learned of the existence of the GreenSky special committee or its advisors, from which it could potentially infer the nature of a competing proposal.

 

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On August 25, 2021, representatives of Financial Sponsor D also provided to representatives of J.P. Morgan a proposed term sheet for a stockholders agreement related to Mr. Zalik’s and Mr. Sheft’s proposed rollover equity investment in the post-closing company. This term sheet was shared with the GreenSky board and the GreenSky special committee.

On August 26, 2021, each of Mr. Zalik and Mr. Sheft delivered a letter to the GreenSky special committee confirming, consistent with their prior statements to the GreenSky board, that Mr. Zalik and Mr. Sheft, respectively, would not proceed with any transaction with Financial Sponsor D in which he might have an interest that is additional to and/or different from the interests of GreenSky’s unaffiliated stockholders unless (i) such transaction is recommended by the GreenSky special committee and (ii) such transaction will be subject to a non-waivable condition requiring the approval of GreenSky’s disinterested stockholders in accordance with the framework established under Kahn v. M & F Worldwide Corporation and its progeny, along with any other stockholder approvals required by applicable law and GreenSky’s governing documents.

On August 26, 2021, the GreenSky special committee also met by video conference with representatives of Wilson Sonsini in attendance. The members of the GreenSky special committee discussed with Wilson Sonsini the process for the selection of an independent financial advisor and the possibility of engaging Piper Sandler as its independent financial advisor. The representatives of Wilson Sonsini noted that they had spoken with representatives from Piper Sandler to explore whether Piper Sandler had any actual or potential conflicts of interest with respect to a proposed engagement. The GreenSky special committee discussed, among other things, Piper Sandler’s prior work for GreenSky and the fact that Piper Sandler had not had any engagements with GreenSky in several years. Following discussion, the GreenSky special committee determined to engage Piper Sandler as its independent financial advisor after considering, among other things, Piper Sandler’s qualifications, its past advisory services to GreenSky and Piper Sandler’s familiarity with GreenSky’s business. The members of the GreenSky special committee also discussed with the representatives of Wilson Sonsini the procedures that the GreenSky special committee would adopt to govern the process in connection with a potential acquisition of GreenSky.

On August 27, 2021, representatives of Cravath sent to representatives of Financial Sponsor D’s outside counsel a revised draft of the Financial Sponsor D merger agreement. Between August 27, 2021 and September 8, 2021, representatives of Cravath (with input from representatives of Wilson Sonsini) and representatives of Financial Sponsor D’s outside counsel engaged in negotiations of the terms of the Financial Sponsor D merger agreement.

On August 27, 2021, at the direction of GreenSky senior management, representatives of J.P. Morgan sent to representatives of GS Group and representatives of Financial Sponsor D a draft term sheet for the backstop funding facility. Between August 27, 2021 and September 14, 2021, representatives of GreenSky and representatives of GS Group engaged in negotiations of the terms of the backstop funding facility term sheet. Between August 27, 2021 and September 8, 2021, representatives of GreenSky and representatives of Financial Sponsor D and its counsel engaged in negotiations of the terms of the backstop funding facility term sheet.

On August 29, 2021, the GreenSky special committee met by video conference, with representatives of Wilson Sonsini and Piper Sandler also in attendance. The representatives of Piper Sandler reviewed with the GreenSky special committee their initial impressions of GreenSky’s sale process to date and discussed the financial projections that had been prepared by members of GreenSky’s management and provided to Piper Sandler. The GreenSky special committee also discussed with its financial and legal advisors the procedures that the GreenSky special committee would adopt to govern the process in connection with a potential acquisition of GreenSky, in order to maximize value for GreenSky’s unaffiliated stockholders. As part of that discussion, the GreenSky special committee considered a request by Mr. Zalik that Mr. Zalik be permitted to meet with representatives of Financial Sponsor D. The GreenSky special committee noted its potential willingness to permit such meeting on the basis that, if the meeting were appropriately conducted, it could help encourage Financial Sponsor D to submit the best bid possible for the unaffiliated stockholders.

 

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On August 29, 2021, the GreenSky board (except for Mr. Sheft, who had recused himself) also met by videoconference, with members of senior management and representatives of J.P. Morgan, Cravath, Troutman Pepper and Wilson Sonsini also in attendance. Mr. Bacci, chair of the GreenSky special committee, and representatives of Wilson Sonsini reviewed with the GreenSky board the work done by the GreenSky special committee since it had been reconstituted, including reporting its engagement of Piper Sandler and that Mr. Freishtat had resigned from the GreenSky special committee. The representatives of J.P. Morgan reviewed with the GreenSky board the latest developments in GreenSky’s discussions with GS Group and Financial Sponsor D, including Financial Sponsor D’s financing plan. The representatives of J.P. Morgan then discussed the possibility of arranging meetings between Mr. Zalik and Ms. Cohen and between Mr. Zalik and a senior representative of Financial Sponsor D, in each case to discuss GS Group’s and Financial Sponsor D’s respective views with respect to the strategic future of GreenSky following its potential acquisition by GS Group or Financial Sponsor D, as applicable. The GreenSky board noted that these meetings could serve the positive purpose, in furtherance of achieving the best value available for stockholders, of having each of GS Group and Financial Sponsor D be more enthusiastic about a potential transaction. The representatives of Cravath and J.P. Morgan then reviewed with the GreenSky board the proposals from GS Group and Financial Sponsor D to acquire GreenSky, including open items therein, the form of consideration offered by the proposals and whether to seek a “collar” from GS Group (with the GreenSky board determining such strategy would not be advisable).

On August 30, 2021, a representative of Cravath distributed to members of the GreenSky board and management, as well as representatives of J.P. Morgan, certain procedures adopted by the GreenSky special committee governing GreenSky’s strategic review process and, specifically, with respect to discussions with GS Group and Financial Sponsor D. Among other things, the process guidelines provided that the GreenSky special committee would direct the sale process with Financial Sponsor D and be kept informed as to all economic or other substantive discussions or other developments relating to any other potential transaction, including the one with GS Group, and that the committee would further participate in setting the strategy concerning GS Group. The process guidelines further directed, consistent with the GreenSky board process to date, that management retention, management compensation and the terms of any rollover of GreenSky equity or related matters with respect to any transaction not be negotiated or discussed unless authorized by the GreenSky special committee.

On August 30, 2021, Mr. Bacci, in his capacity as chair of the GreenSky special committee, also spoke with Mr. Zalik regarding the proposed potential meeting between Mr. Zalik and representatives of Financial Sponsor D, particularly relating to the purpose and appropriate conduct of any such meeting.

On August 31, 2021, following further discussion between Mr. Bacci and Mr. Babbit, the GreenSky special committee agreed that Mr. Zalik could participate in such a meeting and communicated that decision to Mr. Zalik, with the instruction that Mr. Zalik was not permitted to discuss at such meeting (i) the possibility of a rollover or reinvestment of proceeds by Mr. Zalik or any other member of management or the GreenSky board, (ii) Mr. Zalik’s post-acquisition compensation or personal arrangements, or the compensation or personal arrangements of any other member of GreenSky’s management or the GreenSky board or (iii) any post-acquisition arrangements relating to the governance of the GreenSky business or the rights of investors in the business. Mr. Zalik agreed to abide by such instruction.

On August 31, 2021, representatives of S&C sent to representatives of Cravath an initial draft of the voting agreement to be entered into by Mr. Zalik and GS Group (which we refer to as the “GS Group voting agreement”), pursuant to which, among other things, Mr. Zalik and certain of his affiliates would agree to vote all of their shares of GreenSky common stock in favor of the GS Group merger agreement and the transactions contemplated thereby; provided that in the event of a change in recommendation by the GreenSky board, the GS Group voting agreement would be reduced to 35% of the total voting power of GreenSky stockholders. Between August 31, 2021 and September 14, 2021, representatives of Cravath (with input from Wilson Sonsini), Troutman Pepper and S&C engaged in negotiations of the terms of the GS Group voting agreement, the GS Group merger agreement and all other related documentation.

 

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On August 31, 2021, representatives of GS Group also held a series of due diligence meetings with representatives of GreenSky in Atlanta, including a dinner meeting between Mr. Zalik and Ms. Cohen.

On September 1, 2021, as had been authorized by the GreenSky special committee, Mr. Zalik and a representative of J.P. Morgan met with representatives of Financial Sponsor D in Nantucket, MA, so that Mr. Zalik and the representatives of Financial Sponsor D could become better acquainted with one another and to discuss their visions for the GreenSky business.

On September 1, 2021, the GreenSky special committee also met by video conference, with representatives of Wilson Sonsini and Piper Sandler also in attendance. The GreenSky special committee discussed with its financial and legal advisors the meeting between Mr. Zalik and the representatives of Financial Sponsor D, which had concluded earlier in the day. The representatives of Piper Sandler reviewed with the GreenSky special committee a sensitivity analysis of certain line items from GreenSky’s 2021 to 2023 outlook for fiscal year 2021 based on actual results through August 2021, which analysis had been prepared by GreenSky senior management, noting that such sensitivity analysis did not alter the overall financial expectations for GreenSky. The sensitivity analysis is described more fully under the section entitled “The Mergers—Certain Unaudited Financial Information” beginning on page 73 of this proxy statement/prospectus. At the request of the committee members, the representatives of Piper Sandler also discussed their views of GreenSky’s strategic review process, noting that given GreenSky’s extensive outreach to possible counterparties, the current approach to the process was logical and strong and that the GS Group and Financial Sponsor D were both in a position to submit strong bids for GreenSky.

On September 2, 2021, representatives of Cravath sent to representatives of Financial Sponsor D’s outside counsel an initial draft of the form of Financial Sponsor D voting agreement to be entered into by Mr. Zalik, Mr. Sheft and related entities, pursuant to which, among other things, Mr. Zalik, Mr. Sheft and certain of their respective affiliates would agree to vote all of their respective shares of GreenSky common stock in favor of the Financial Sponsor D merger agreement and the transactions contemplated thereby; provided that in the event of a change in recommendation by the GreenSky board, Mr. Zalik’s voting agreement would be reduced to 35% of the total voting power of GreenSky stockholders and Mr. Sheft’s voting agreement would be terminated. Between September 2, 2021 and September 8, 2021, representatives of Cravath (with input from representatives of Wilson Sonsini) and outside counsel to Financial Sponsor D engaged in negotiations of the terms of the Financial Sponsor D voting agreement, the Financial Sponsor D merger agreement and all other related documentation.

On September 3, 2021, representatives of Financial Sponsor D’s outside counsel sent representatives of Cravath initial drafts of the equity and debt commitment letters for Financial Sponsor D’s financing. Between September 3, 2021 and September 8, 2021, representatives of Cravath and Financial Sponsor D’s outside counsel engaged in negotiations of the terms of the equity commitment and debt commitment letters.

Later on September 3, 2021, GS Group delivered a revised written proposal to acquire GreenSky in an all-stock transaction at an exchange ratio of 0.0277 of a share of GS Group common stock for each share of GreenSky Class A common stock, which represented a price of approximately $11.50 per share of GreenSky Class A common stock based upon the closing trading price per share of GS Group common stock on September 2, 2021. The proposal required that no payments be made under the tax receivable agreement in connection with the transaction, and that $200 million of Mr. Zalik’s proceeds from the transaction be held back and released upon completion of two years of service at GS Group (subsequently, the holdback amount was reduced to $132 million to reflect the adverse tax consequence to Mr. Zalik in the event of a forfeiture of the holdback). It was further contingent on GS Group resolving a certain due diligence item prior to signing. GS Group also sent to GreenSky revised drafts of the GS Group merger agreement and all other related documentation.

On September 3, 2021, Financial Sponsor D also delivered a revised written proposal to acquire GreenSky in an all-cash transaction for $11.75 per share of GreenSky Class A common stock. The proposal required that no

 

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payments be made under the tax receivable agreement in connection with the transaction, and that Mr. Zalik and Mr. Sheft each roll over $280 million individually ($560 million in the aggregate) of proceeds, with the remainder of the financing to come in the form of equity and debt commitments from an affiliate of Financial Sponsor D. The proposal did not include a financing condition. Financial Sponsor D also sent to GreenSky revised drafts of the Financial Sponsor D merger agreement and all other related documentation, including revised drafts of the equity and debt commitment letters for Financial Sponsor D’s financing.

On September 4, 2021, the GreenSky special committee met by video conference with representatives of Wilson Sonsini and Piper Sandler also in attendance. The GreenSky special committee discussed with its financial and legal advisors the written proposals that GreenSky received from GS Group and Financial Sponsor D to acquire GreenSky. The financial and legal advisors reviewed the key terms of each of the proposals, and Piper Sandler shared a preliminary analysis with respect to valuation. The GreenSky special committee discussed with its financial and legal advisors potential next steps in GreenSky’s sale process, including strategies and timing for soliciting even more competitive bids from the counterparties. The GreenSky special committee additionally discussed the appropriate timing for permitting further discussions relating to a potential rollover between Financial Sponsor D and the relevant stockholders, and the committee members also determined that it would be appropriate to permit Mr. Sheft, who remained recused in all respects from GreenSky’s process, to receive the details relating to Financial Sponsor D’s bid, while noting that he would not receive any details relating to the bid from the GS Group.

On September 5, 2021, the GreenSky board (except for Mr. Sheft who had recused himself) met telephonically, with members of senior management and representatives of J.P. Morgan, Cravath, Troutman Pepper, Wilson Sonsini and Piper Sandler also in attendance, to discuss the September 3, 2021 proposals received from each of GS Group and Financial Sponsor D. The representatives of J.P. Morgan reviewed the key terms of both proposals, as well as the public process GreenSky undertook in 2019-2020 and the then-current process in 2021 to sell GreenSky. The representatives of Cravath reviewed the key differences in legal terms proposed by GS Group and Financial Sponsor D in the draft documentation they had submitted with their proposals (including as to any potential voting agreement). Mr. Benjamin reviewed with the GreenSky board the terms of the backstop funding facility term sheets that had been negotiated to date. The representatives of J.P. Morgan then reviewed certain preliminary financial information and analyses with respect to GreenSky and each of the proposals from GS Group and Financial Sponsor D and a sensitivity analysis of certain line items from GreenSky’s 2021 to 2023 outlook for fiscal year 2021 based on actual results through August 2021, which analysis had been prepared by GreenSky senior management. The sensitivity analysis is described more fully under the section entitled “The Mergers—Certain Unaudited Financial Information” beginning on page 73 of this proxy statement/prospectus.

Thereafter, the GreenSky board and representatives of the financial and legal advisors discussed the two proposals and next steps, noting, among other things, the viability of both proposals and comparing the all-stock versus all-cash nature of the bids. The GreenSky board again noted the lack of a “collar” in the GS Group proposal, but determined that the currency offered by the proposal was strong and that, strategically, it was preferable to focus on improving the highest exchange ratio available rather than price protection. The GreenSky board, following discussion with representatives of the financial and legal advisors, determined that, given how close the two proposals were on value, GreenSky solicit “best and final” bids due on the evening of September 8, 2021.

The representatives of J.P. Morgan also noted that agreement on rollover terms was a requirement to Financial Sponsor D’s bid and that such negotiations had not yet commenced as Mr. Zalik and Mr. Sheft were awaiting authorization from the GreenSky special committee before engaging in those discussions. The representatives of J.P. Morgan also noted that the GS Group proposal still contemplated that Mr. Zalik would subject $200 million of his proceeds to a holdback arrangement and employment agreement, which was also awaiting discussion and negotiation. Mr. Zalik indicated that although he and the GreenSky board were focused on obtaining the best value achievable for the public stockholders, both bidders were asking for concessions from

 

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him and, unless he knew what the terms of those arrangements would be, he would not be able to confirm to the GreenSky board on September 8, 2021 if he would be able to support either winning bidder. Noting that it would not be practical or beneficial to continue to defer these discussions until after a winning bidder was selected, the GreenSky board expressed its view, subject to further discussion by and approval of the GreenSky special committee, that Mr. Zalik be authorized to engage in discussions with GS Group regarding the terms of the holdback agreement and his future role with GS Group and with Financial Sponsor D regarding the terms of his rollover equity investment and future role in GreenSky following its potential acquisition by Financial Sponsor D, but not, in either case, to discuss any of the proposed transaction terms of either party’s proposals, such as price per share. Mr. Zalik agreed to these parameters. Pending the decision of the GreenSky special committee, the GreenSky board also expressed its view that Mr. Sheft should be permitted to engage in those same discussions with only Financial Sponsor D, and to discuss rollover terms with Mr. Zalik. However, the GreenSky board noted that Mr. Sheft should not be told any information regarding GS Group’s proposal.

On September 5, 2021, the GreenSky special committee also met by video conference, with representatives of Wilson Sonsini and Piper Sandler also in attendance. The GreenSky special committee discussed with its financial and legal advisors the acquisition proposals received from GS Group and Financial Sponsor D, the key differences between the proposals and potential next steps and strategy for GreenSky’s sale process. The GreenSky special committee received from and discussed with Piper Sandler additional financial analysis with respect to the proposals. The GreenSky special committee also discussed certain requests made by Mr. Zalik and Mr. Sheft to engage in discussions with Financial Sponsor D regarding the terms of their respective rollover equity investments and future roles in GreenSky following its potential acquisition by Financial Sponsor D. Following discussion, and after considering, among other things, GreenSky’s competitive sale process, the proposed timeline for the potential transaction and the value of each of the GS Group and Financial Sponsor D offers, the GreenSky special committee determined that it would be in the best interest of GreenSky’s unaffiliated stockholders to authorize Mr. Zalik and Mr. Sheft to engage in those discussions with Financial Sponsor D. The GreenSky special committee also discussed and expressed its ongoing agreement with the strategy that was developed at the GreenSky board meeting held earlier in the day.

Also on September 5, 2021, at a special meeting of the board of directors of GS Bank (which we refer to as the “GS Bank board”), held via videoconference, members of GS Group and GS Bank management and other senior leaders discussed with the GS Bank board, and answered its questions regarding, various matters relating to the proposed mergers and other transactions contemplated by the merger agreement, including the strategic rationale therefor, the negotiations that had taken place, the merger consideration to be paid by GS Group and other key terms of the merger agreement and related agreements. After discussion, the GS Bank board unanimously determined that it was advisable and in the best interests of GS Bank to: (i) approve and authorize the proposed mergers and other transactions contemplated by the merger agreement, including entry by GS Bank into the merger agreement and other transaction documents, and any and all related actions contemplated thereby, subject to approval of the proposed mergers and other transactions contemplated by the merger agreement by the GS Group board; and (ii) delegate to the chair of GS Bank’s board and GS Bank’s chief executive officer joint authority to take any and all actions in connection with the proposed mergers and other transactions contemplated by the merger agreement that the GS Bank board could take, including without limitation to approve material changes to the terms of the transaction documents presented to the GS Bank board at the meeting, and to approve the final merger consideration up to a certain amount.

Also on September 5, 2021, at a special meeting of the GS Group board, held via videoconference, members of GS Group management and other senior leaders discussed with the GS Group board, and answered its questions regarding, various matters relating to the proposed mergers and other transactions contemplated by the merger agreement, including the strategic rationale therefor, the negotiations that had taken place, the merger consideration to be paid by GS Group and other key terms of the merger agreement and related agreements. After discussion and taking into account the factors described below under “—GS Group’s Reasons for the Mergers”, the GS Group board unanimously determined that it was advisable and in the best interests of GS Group and its stockholders to: (i) approve and authorize the proposed mergers and other transactions contemplated by the

 

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merger agreement, including entry by GS Group into the merger agreement and other transaction documents, and any and all related actions contemplated thereby, subject to approval by the GS Group special transaction committee (as defined below) of the final merger consideration and material changes to the proposed mergers and other transactions contemplated by the merger agreement, if any; (ii) approve and authorize the issuance of GS Group common stock as merger consideration, including the taking of any and all actions related thereto; and (iii) establish a special committee of the GS Group board (which we refer to as the “GS Group special transaction committee”) with the authority to take any and all actions in connection with the proposed mergers and other transactions contemplated by the merger agreement that the GS Group board could take, including without limitation to approve material changes or amendments to the terms and conditions of the transaction documents presented to the GS Group board and to approve the final merger consideration up to a certain amount.

Later on September 5, 2021, at the direction of the GreenSky board, representatives of J.P. Morgan contacted representatives of GS Group and Financial Sponsor D to request that each of GS Group and Financial Sponsor D provide updated “best and final” written proposals to acquire GreenSky no later than September 8, 2021.

On September 8, 2021, the GreenSky special committee met by video conference, with representatives of Wilson Sonsini and Piper Sandler also in attendance. The GreenSky special committee discussed with its financial and legal advisors the upcoming deadline for “best and final” acquisition proposals from Financial Sponsor D and GS Group and the GreenSky special committee’s strategy for addressing various potential outcomes that could arise following the submission of those proposals.

Subsequently, on September 8, 2021, the chair of the GS Bank board and GS Bank’s chief executive officer approved material changes to the merger agreement, which changes aligned with the final terms of the mergers and other transactions contemplated by the merger agreement, including the increase in the merger consideration, in each case ultimately approved by the GS Group special transaction committee as described below.

Later on September 8, 2021, GS Group delivered a revised written proposal to acquire GreenSky in an all-stock transaction at an exchange ratio of 0.03 shares of GS Group common stock for each share of GreenSky Class A common stock, which represented a price of approximately $12.15 per share based upon the closing trading price per share of GS Group common stock on September 8, 2021, and prices of $12.35 and $12.40 per share of GreenSky Class A common stock, respectively, based on the five- and 10-day volume-weighted average price of GS Group common stock measured from September 8, 2021. The proposal remained contingent on GS Group resolving a certain due diligence item prior to signing. GS Group also sent to GreenSky revised drafts of the GS Group merger agreement and all other related documentation.

On September 8, 2021, Financial Sponsor D also delivered a revised written proposal to acquire GreenSky in an all-cash transaction for $12.00 per share of GreenSky Class A common stock. Financial Sponsor D also sent revised drafts of the Financial Sponsor D merger agreement and all other related documentation.

On September 9, 2021, the GreenSky board (except for Mr. Sheft, who had recused himself) met telephonically, with members of senior management and representatives of J.P. Morgan, Cravath, Troutman Pepper, Wilson Sonsini and Piper Sandler also in attendance, to discuss the revised written proposals received from each of GS Group and Financial Sponsor D. The representatives of J.P. Morgan and Cravath reviewed with the GreenSky board the differences in the key financial and legal terms, respectively, of the proposals. The GreenSky board then discussed with the financial and legal advisors the proposals, including the pros and cons of an all-stock transaction compared to an all-cash transaction, the possibility of securing a “collar” (with the GreenSky board continuing to conclude that it was preferable to focus on achieving the best exchange ratio possible) and the diligence item that remained a condition to signing for GS Group. Mr. Zalik reiterated that he was willing to accept either GS Group’s proposed retention holdback or Financial Sponsor D’s proposed rollover to facilitate a transaction with either party, even though he believed the terms of the retention holdback or rollover put him at a disadvantage relative to GreenSky’s public stockholders. Following the discussion, the

 

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GreenSky board concluded that if GS Group were willing to remove as a pre-signing condition the resolution of a certain due diligence item by the end of that day, then GreenSky should move forward with GS Group to finalize documentation in the coming days. Pending resolution of this diligence matter, the GreenSky board authorized management to agree to exclusivity with GS Group for a period sufficient to allow the parties to enter into definitive documentation, which was expected to occur within several days.

The GreenSky board then discussed whether it made sense to keep the GreenSky special committee in place given that the GreenSky board intended to proceed with a transaction with GS Group, which did not involve differential beneficial consideration or other issues that motivated the formation of the GreenSky special committee in connection with the Financial Sponsor D proposal. After discussion among the GreenSky board and the financial and legal advisors, the GreenSky board concluded that the GreenSky special committee should continue to meet and make a recommendation to the GreenSky board prior to final approval of any transaction.

On September 9, 2021, the GreenSky special committee also met by video conference, with representatives of Wilson Sonsini, Piper Sandler, Cravath and J.P. Morgan also in attendance. The GreenSky special committee discussed with the financial and legal advisors present the revised proposals received from each of GS Group and Financial Sponsor D, the key features of each proposal and the diligence item that remained a condition to signing for GS Group. The GreenSky special committee reviewed with the financial and legal advisors present GreenSky’s strategy for addressing each of the proposals, and following discussion, the GreenSky special committee concurred with the strategy described at the meeting of the GreenSky board, which was held immediately prior to the meeting.

Following the GreenSky special committee meeting on September 9, 2021, at the direction of the GreenSky board, representatives of J.P. Morgan informed representatives of GS Group that GreenSky was prepared to move forward with them contingent upon GS Group agreeing to remove as a pre-signing condition the resolution of a certain due diligence item by the end of the day. During the course of that day, GS Group determined that such a pre-signing condition would not be needed and agreed to do so. Thereafter, representatives of Cravath sent to representatives of S&C an initial draft of an exclusivity agreement. Between September 9, 2021 and September 10, 2021, representatives of Cravath and S&C negotiated the terms of the exclusivity agreement, which was entered into by GS Group and GreenSky on September 10, 2021, and provided for an exclusivity period through September 14, 2021.

On September 10, 2021, the GreenSky board (except for Mr. Sheft, who had recused himself) met telephonically, with members of senior management and representatives of J.P. Morgan, Cravath, Troutman Pepper, Wilson Sonsini and Piper Sandler also in attendance, to discuss the timetable for entering into definitive documentation with GS Group. The GreenSky board determined to target signing at the end of the day on September 14, 2021 after market close and to announce a transaction on the morning of September 15 before the market opened.

On September 10, 2021, the GreenSky special committee also met by video conference, with representatives of Wilson Sonsini, Piper Sandler, Cravath and J.P. Morgan also in attendance. The GreenSky special committee continued the discussion from the meeting of the GreenSky board that occurred immediately prior to the meeting and solicited views from the financial and legal advisors present regarding the timetable for entering into definitive documentation with GS Group. The GreenSky special committee and the advisors present discussed the proposed communication strategy concerning Financial Sponsor D.

Between September 10, 2021 and September 14, 2021, representatives of GreenSky and GS Group and their respective legal advisors prepared agreed forms of the transaction documentation for the requisite review by the applicable governing bodies of GreenSky and GS Group.

On September 11, 2021, a representative of Cravath, acting at the direction of the GreenSky board, had a telephone conversation with Mr. Sheft during which Mr. Sheft was provided an update on the process to date,

 

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including that the GreenSky board had selected GS Group as the winning bidder and was targeting a signing of a definitive agreement with GS Group on September 14, 2021. In that discussion, Mr. Sheft stated that since he had been recused from the process for the past several weeks, he thought it prudent to continue to recuse himself for the remainder of the GreenSky board’s deliberative process, including any GreenSky board committee meetings with respect thereto.     

On September 14, 2021, representatives of J.P. Morgan hosted a telephonic meeting with representatives of GS Group in order for GreenSky and representatives of its financial and legal advisors to perform reverse due diligence on GS Group.

On September 14, 2021, the GreenSky special committee also met by video conference, with representatives of Wilson Sonsini, Piper Sandler and Cravath also in attendance. The representatives of Wilson Sonsini reviewed with the GreenSky special committee their fiduciary duties and standards of judicial review that can apply to directors’ decisions under Delaware law. The representatives of Wilson Sonsini described the purpose of the GreenSky special committee and its role in connection with GreenSky’s evaluation of the proposal put forth by GS Group to acquire GreenSky. It was noted that although the GS Group proposal did not involve the type of different or additional interest that gave rise to the establishment of the GreenSky special committee, given the GreenSky special committee’s intensive involvement on behalf of GreenSky’s unaffiliated stockholders, and the GreenSky special committee’s work in comparing the GS Group proposal with the proposal by Financial Sponsor D to acquire GreenSky, it was proposed, as had been discussed with the GreenSky special committee members leading up to the meeting, that the GreenSky special committee formally determine whether to recommend the GS Group proposal to the GreenSky board.

The representatives from Piper Sandler reviewed their valuation analysis with the GreenSky special committee. The representatives of Piper Sandler described, among other things, the structure and key features of the proposed acquisition of GreenSky by GS Group, Piper Sandler’s valuation analysis of GreenSky and GS Group, the historic stock performance of GreenSky and GS Group and how GreenSky’s tax receivable agreement had been taken into account in Piper Sandler’s valuation of GreenSky and the proposed transaction. The representatives of Piper Sandler noted their conclusion that the merger consideration to be paid to the holders of GreenSky’s Class A common stock in connection with the proposed acquisition of GreenSky by GS Group was fair, from a financial point of view, to such holders. The representatives of Piper Sandler further noted that they would deliver a written opinion to the GreenSky special committee reflecting that conclusion.

The members of the GreenSky special committee engaged in a discussion regarding whether the GreenSky special committee was supportive of the proposed acquisition of GreenSky by GS Group and whether the GreenSky special committee was prepared to recommend such transaction to the GreenSky board. Following discussion, the GreenSky special committee unanimously resolved that the proposed acquisition of GreenSky by GS Group was in the best interests of GreenSky and GreenSky stockholders, including its unaffiliated stockholders, and to recommend that the GreenSky board approve the transaction.

Later on September 14, 2021, the GreenSky board (except for Mr. Sheft, who had recused himself) met telephonically, with members of senior management and representatives of J.P. Morgan, Cravath, Troutman Pepper, Wilson Sonsini and Piper Sandler also in attendance, to review and potentially approve the execution of the GS Group merger agreement and the other transactions contemplated thereby. The representatives of Cravath reviewed with the GreenSky board an updated letter provided by J.P. Morgan disclosing its prior relationships with GreenSky and GS Group. Thereafter, the representatives of Cravath reviewed with the GreenSky board their fiduciary duties in the context of the transaction with GS Group and the legal terms of the GS Group merger agreement and related agreements, noting the terms were substantially the same as those previously reviewed with the GreenSky board and reporting that all such documents were in agreed form. The representatives of J.P. Morgan then reviewed J.P. Morgan’s financial analyses of the exchange ratio and, following discussion, rendered to the GreenSky board J.P. Morgan’s oral opinion, which was subsequently confirmed in writing, to the effect that, as of September 14, 2021 and based upon and subject to the factors and various assumptions made,

 

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procedures followed, matters considered, and limitations and qualifications on the review undertaken as described in the opinion, the exchange ratio in the proposed company merger was fair, from a financial point of view, to the holders of the GreenSky Class A common stock. For more information, see the section entitled “The Mergers—Opinion of J.P. Morgan, GreenSky’s Financial Advisor” beginning on page 76 of this proxy statement/prospectus and Annex B to this proxy statement/prospectus.

The GreenSky board engaged in a discussion regarding the transaction with GS Group and the benefits it afforded to GreenSky and its stockholders. Mr. Bacci, in his capacity as Chair of the GreenSky special committee, delivered the GreenSky special committee’s recommendation that the GreenSky board should approve the transaction with GS Group. The GreenSky board then recessed and the members of the Compensation Committee convened and unanimously approved the treatment of GreenSky equity awards as provided for in the GS Group merger agreement and recommended that the GreenSky board submit to the stockholders of GreenSky a non-binding, advisory proposal to approve the compensation that may be paid or become payable to GreenSky’s named executive officers in connection with the mergers and recommend to such stockholders the approval of such proposal. Thereafter, the GreenSky board reconvened and (i) determined that it was in the best interests of GreenSky and its stockholders, and declared it advisable, that GreenSky enter into the GS Group merger agreement and related agreements and consummate the transactions contemplated thereby, (ii) approved and adopted the GS Group merger agreement and the other transaction documents (including the GS Group voting agreement), (iii) adopted resolutions recommending that GreenSky stockholders vote for the approval of the GS Group merger agreement and (iv) directed that the GS Group merger agreement and the transactions contemplated thereby be submitted to GreenSky stockholders for adoption.

Also on September 14, 2021, the GS Group special transaction committee met in person to review the final terms of the mergers and other transactions contemplated by the merger agreement, including the increase in the merger consideration. After discussion, the GS Group special transaction committee determined that it was advisable and in the best interests of GS Group and its stockholders to: (i) approve the final terms and conditions of the mergers and other transactions contemplated by the merger agreement, including the final merger consideration; and (ii) authorize GS Group to proceed with the mergers and other transactions contemplated by the merger agreement as had been approved by the GS Group board at its September 5, 2021 meeting.

Following the conclusion of the GreenSky board meeting and the GS Group special transaction committee meeting, the parties executed and delivered the GS Group merger agreement and related agreements after market close on September 14, 2021.

On September 15, prior to the opening of trading on NASDAQ and NYSE, the parties issued a joint press release announcing the transaction.

GS Group’s Reasons for the Mergers

In reaching its decision to approve the merger agreement, the mergers and the other transactions contemplated by the merger agreement, the GS Group board consulted with GS Group management, who were advised by GS Group’s financial advisor, Goldman Sachs & Co. LLC, and outside legal counsel, and considered a number of factors. GS Group’s reasons for the mergers include the following:

 

•

its knowledge of GreenSky’s business, operations, financial condition, asset quality, earnings and prospects, taking into account the results of GS Group’s due diligence review of GreenSky;

 

•

its assessment that GS Group’s management team would be able to successfully integrate and operate the GreenSky business after the mergers;

 

•

its view that the terms and conditions of the merger agreement and the transactions contemplated thereby, including the representations, warranties, covenants, closing conditions and termination provisions, are comprehensive and favorable to completing the mergers;

 

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•

the fact that the merger agreement places limitations on GreenSky’s ability to seek a competing proposal and requires GreenSky to pay GS Group a termination fee of $75 million if the merger agreement is terminated under certain circumstances;

 

•

the amount and form of consideration to be paid in the mergers, including the fact that the exchange ratio is fixed;

 

•

current financial market conditions and trading information with respect to, shares of GS Group common stock and GreenSky Class A common stock;

 

•

the entry into the voting agreement by Mr. Zalik and certain of his affiliates, pursuant to which each such stockholder agreed to vote all of their subject shares in favor of the GreenSky merger proposal (subject to limited exceptions if the GreenSky board no longer recommends that holders of GreenSky Class A common stock vote in favor of the GreenSky merger proposal) as further described in the section entitled “—Voting Agreement” beginning on page 99 of this proxy statement/prospectus;

 

•

the entry into the holdback agreement by Mr. Zalik, pursuant to which Mr. Zalik agreed that a portion of the shares of the GS Group common stock that he otherwise would have been entitled to receive as merger consideration will instead be paid in the form of shares of GS Group restricted stock, subject to the transfer restrictions and other conditions as further described in the section entitled “—Holdback Agreement” beginning on page 99 of this proxy statement/prospectus;

 

•

the regulatory and other approvals required in connection with the mergers;

 

•

the potential to engage in a strategically compelling transaction that will help scale GS Group’s digital consumer banking business, through GreenSky’s differentiated lending capabilities and growing merchant and consumer ecosystem;

 

•

the opportunity to acquire a merchant network with over 10,000 active merchants and a customer base that is attractive from a credit risk perspective;

 

•

the experienced management team and employee base that comes with an acquisition of GreenSky, which team brings with them a depth of industry experience and relationships, including relationships cultivated with GreenSky’s merchant network, and which employee base can help support broader business initiatives;

 

•

the enhancement of GS Group’s digital consumer banking platform through the integration of GreenSky’s advanced technology, consistent with GS Group’s goal to provide an integrated and customer-centric digital offering; and

 

•

the opportunity to access the attractive home improvement market and engage in a financially attractive transaction that will diversify revenues and over time is expected to produce a return above GS Group’s targeted hurdle rate.

The GS Group board also considered a number of negative factors, risks and uncertainties in evaluating the potential acquisition of GreenSky and in reaching its decision to approve the merger agreement, the mergers and the other transactions contemplated thereby. Negative factors, risks and uncertainties considered by GS Group include the following:

 

•

the diversion of management attention and resources needed to complete the mergers and integrate GreenSky into GS Group following the closing of the mergers;

 

•

the challenges and difficulties relating to integrating the operations of GreenSky with GS Group’s operations;

 

•

the risk that the potential benefits of the acquisition may not be fully or even partially achieved, or may not be achieved within the expected time frame;

 

•

costs associated with the mergers;

 

 

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•

the risk that the mergers may not be consummated despite the parties’ efforts;

 

•

the possibility that events may occur that materially and adversely affect the operations or financial condition of GreenSky and its subsidiaries, but which may not entitle GS Group to terminate the merger agreement;

 

•

the possibility of litigation challenging the mergers, and the further possibility that any such litigation could impede or delay the closing of the mergers; and

 

•

other risks related to the mergers and the businesses of GS Group and GreenSky, which are described under the section entitled “Risk Factors” beginning on page 30 of this proxy statement/prospectus.

The GS Group board approved the merger agreement after GS Group’s senior management discussed with the GS Group board a number of factors, including certain of those described above and the business, assets, liabilities, results of operations, financial performance, strategic direction and prospects of GreenSky. The GS Group board did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative weights to the specific factors it considered in reaching its determination. The GS Group board viewed its position as being based on all the information and the factors presented to and considered by it. In addition, individual directors may have given different weights to different information and factors.

In addition, as described in the section entitled “—Background of the Transactions”, the GS Bank board separately evaluated the mergers, held a number of meetings and consulted with members of GS Group and GS Bank management and other senior leaders in reaching its decision to approve the merger agreement, the mergers and the other transactions contemplated by the merger agreement.

It should be noted that this explanation of GS Group’s reasoning and all other information presented in this section is forward-looking in nature, and therefore should be read in light of the factors discussed under the heading “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 28.

GreenSky’s Reasons for the Mergers; Recommendation of the GreenSky Board of Directors

At a meeting held on September 14, 2021, the GreenSky board, acting upon the unanimous recommendation of the GreenSky special committee, (i) determined that it was in the best interests of GreenSky and its stockholders and declared it advisable that GreenSky enter into the merger agreement and other related agreements and consummate the transactions contemplated thereby, (ii) approved and adopted the merger agreement and other related agreements, (iii) resolved to recommend that GreenSky stockholders vote for the adoption of the merger agreement and (iv) directed that the merger agreement and the transactions contemplated thereby be submitted to GreenSky stockholders for adoption.

As described in the section entitled “The Mergers—Background of the Transactions” beginning on page 41 of this proxy statement/prospectus, in evaluating the mergers, the GreenSky board held a number of meetings, consulted with and received the advice of representatives of GreenSky’s outside legal counsel and financial advisors, held discussions with GreenSky’s senior management and considered the business, assets and liabilities, results of operations, financial performance, strategic direction and prospects of GreenSky and GS Group. In addition, the GreenSky special committee separately evaluated the mergers, held a number of meetings and consulted with and received the advice of representatives of the GreenSky special committee’s outside legal counsel and financial advisor. In making its determination, the GreenSky board considered a number of factors that it believed supported its decision to enter into the merger agreement and to recommend its adoption by GreenSky stockholders. In making its determination, the GreenSky special committee considered a number of factors that it believed supported its conclusion that the mergers were in the best interests of GreenSky and GreenSky’s stockholders, including its unaffiliated stockholders, and its decision to recommend that the GreenSky board approve the merger agreement and the related transactions. These factors included, but were not limited to, the following (not necessarily in order of relative importance):

 

 

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•

the recent and historical market prices for GreenSky Class A common stock, including the fact that the merger consideration had an implied value of:

 

•

$12.28 per share of GreenSky Class A common stock based on the $409.26 closing trading price per share of GS Group common stock on September 13, 2021, the last full trading day prior to the execution of the merger agreement, which represented a premium of approximately 39% to the $8.85 closing trading price per share of GreenSky Class A common stock on September 13, 2021;

 

•

$12.31 per share of GreenSky Class A common stock based on the $410.39 volume weighted average price per share of GS Group common stock for the 10-trading-day period ended September 13, 2021, which represented a premium of approximately 48% to the $8.34 volume weighted average price per share of GreenSky Class A common stock for the 10-trading-day period ended September 13, 2021; and

 

•

$12.13 per share of GreenSky Class A common stock based on the $404.28 volume weighted average price per share of GS Group common stock for the 30-trading day period ended September 13, 2021, which represented a premium of approximately 52% to the $8.00 volume weighted average price per share of GreenSky Class A common stock for the 30-trading-day period ended September 13, 2021;

 

•

the GreenSky board’s understanding of GreenSky’s business, operations, financial condition, earnings, prospects, competitive position and the nature of the industry in which GreenSky competes;

 

•

the GreenSky board’s understanding of the risks, uncertainties and challenges facing GreenSky and the industry in which GreenSky competes, including the risks that GreenSky would face if it continued as a stand-alone company;

 

•

the GreenSky board’s belief that volatility in the price of GreenSky Class A common stock does not engender market confidence conducive to GreenSky maintaining stable bank partner funding on a stand-alone basis;

 

•

the commitment by GS Group to provide a backstop loan participation purchase facility for additional funding for loans originated through the GreenSky program during the period between the signing of the merger agreement and consummation of the mergers and, in the event the mergers are not consummated, from the merger agreement termination date through the last day of the ninth full calendar month following such termination date. See the section entitled “The Mergers—Backstop Loan Participation Purchase Facility Commitment Letter” beginning on page 99 of this proxy statement/prospectus;

 

•

the GreenSky board’s belief that the other alternatives to a sale of the entire company, including remaining independent or fundamentally changing GreenSky’s business model to further diversify its funding, which alternatives the GreenSky board evaluated with the assistance of GreenSky’s financial advisors and outside legal counsel, did not represent a more attractive alternative to a sale in light of, among other factors, the potential risks, rewards and uncertainties associated with those alternatives;

 

•

the GreenSky board’s process for soliciting offers from third parties that were believed to be the most able and willing to pay the highest price for GreenSky, which included providing such parties with an opportunity to conduct due diligence and meetings with members of GreenSky’s senior management, as described above in the section entitled “—Background of the Transactions”;

 

•

the course and history of competitive negotiations with GS Group which, among other things, resulted in an increase in the price GS Group was willing to offer to acquire GreenSky from an implied value of $7.50 per share of GreenSky common stock (based on the closing trading prices of GreenSky Class A common stock and GS Group common stock on July 1, 2021) in GS Group’s non-binding proposal delivered to GreenSky on July 2, 2021 to the implied value of $12.28 per share of GreenSky Class A common stock (based on the closing trading prices of GreenSky Class A common stock and GS Group common stock on September 13, 2021), as described above in the section entitled “—Background of the Transactions”;

 

 

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•

the GreenSky board’s belief that, based on discussions with GS Group and other potential counterparties, the merger consideration represented GS Group’s best and final offer and the highest implied value per share of GreenSky Class A common stock that GS Group or other potential counterparties would be willing to pay, and any request for a higher value or solicitation of additional bids from other third parties would have created a meaningful risk that GS Group might determine not to enter into the merger agreement and to terminate negotiations, in which event GreenSky stockholders would lose the opportunity to obtain the implied value of the merger consideration being offered;

 

•

the fact that GreenSky engaged in, or attempted to initiate, discussions regarding a potential sale transaction with numerous third parties in a public process in 2019-2020 and that only GS Group had put forth a proposal that was actionable at the time, as described above in the section entitled “—Background of the Transactions”;

 

•

the possibility that the trading price of GreenSky Class A common stock, absent the mergers, would not reach and sustain at least the level implied by the merger consideration in the near term, or at all;

 

•

the GreenSky board’s belief that the receipt of GS Group common stock as merger consideration provides GreenSky stockholders with the opportunity to have ownership in a company that has a significantly more risk-diversified business than GreenSky’s stand-alone business, to benefit from the complementary strengths of GreenSky and GS Group and to share in any future price appreciation of, and dividends declared on, GS Group common stock;

 

•

the relatively small percentage of the outstanding public float of the GS Group common stock represented by the GS Group common stock that will be issued to holders of GreenSky Class A common stock and Common Units in the mergers, as applicable, which would accordingly account for a relatively small percentage of the average trading volume of GS Group common stock following consummation of the mergers, and the GreenSky board’s resulting expectation that former holders of GreenSky Class A common stock and Common Units would be able to sell the GS Group common stock in the market after the closing of the mergers, should they choose to, without significantly impacting the trading price of GS Group common stock;

 

•

the fact that the exchange ratio is fixed and will not fluctuate as a result of changes in the market price of GreenSky Class A common stock or GS Group common stock, which allows such holders of GreenSky Class A common stock and Common Units to receive the benefit of any share price appreciation prior to closing of the mergers;

 

•

the result of GreenSky’s due diligence investigation of GS Group, conducted with the assistance of GreenSky’s financial and legal advisors, and the experience and extensive track record of GS Group and its management, including with respect to successfully acquiring other companies and integrating past acquisitions;

 

•

the expectation that, for holders of GreenSky Class A common stock that are U.S. holders, the mergers will generally qualify as a tax-free transaction for United States federal income tax purposes;

 

•

the oral opinion rendered by J.P. Morgan, financial advisor to GreenSky, to the GreenSky board, which was subsequently confirmed in writing, to the effect that, as of September 14, 2021 and based upon and subject to the factors and various assumptions made, procedures followed, matters considered, and limitations and qualifications on the review undertaken as described in the opinion, the exchange ratio in the proposed company merger was fair, from a financial point of view, to the holders of GreenSky Class A common stock. See the section entitled “The Mergers—Opinion of J.P. Morgan, GreenSky’s Financial Advisor” beginning on page 76 of this proxy statement/prospectus and Annex B to this proxy statement/prospectus;

 

•

the oral opinion rendered by Piper Sandler, financial advisor to the GreenSky special committee, to the GreenSky special committee on September 14, 2021, subsequently confirmed by delivery of a written opinion, dated as of September 14, 2021, that as of such date and based upon and subject to the factors and assumptions set forth in its written opinion, the merger consideration was fair to holders of GreenSky

 

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Class A common stock from a financial point of view. See the section entitled “The Mergers—Opinion of Piper Sandler, GreenSky Special Committee’s Financial Advisor” beginning on page 82 of this proxy statement/prospectus and Annex C to this proxy statement/prospectus;

 

•

the likelihood that the mergers would be consummated and the anticipated timing of closing based on, among other things:

 

•

the limited scope of the conditions to closing and that a vote of the GS Group stockholders is not required to consummate the mergers;

 

•

the level of GS Group’s commitment to satisfy the conditions to closing, and the assessment of the GreenSky board, after considering the advice of its legal advisors, regarding the likelihood of such closing conditions being satisfied;

 

•

the scope of what can constitute a material adverse effect under the merger agreement and the exceptions therefrom that were negotiated by GreenSky; and

 

•

that GreenSky is entitled to specific enforcement of GS Group’s obligations under the merger agreement;

 

•

other terms of the merger agreement, including, among other things:

 

•

GreenSky’s ability, under certain circumstances and prior to receipt of the requisite approval of GreenSky stockholders, to consider and respond to an unsolicited alternative acquisition proposal, to furnish information to the person making such a proposal and to engage in discussions or negotiations with the person making such a proposal;

 

•

the GreenSky board’s ability, under certain circumstances and prior to receipt of the requisite approval of GreenSky stockholders, to effect an adverse recommendation change, including to withdraw, qualify or modify the GreenSky board’s recommendation in favor of the GreenSky merger proposal or to approve or recommend an alternative acquisition proposal; and

 

•

the GreenSky board’s assessment, after considering the advice of its financial and legal advisors, that the termination fee of $75 million would not present a meaningful deterrent to a third party from making or consummating an alternative acquisition proposal for GreenSky even in light of the fact that GreenSky will not have the right to terminate the merger agreement to accept a superior proposal, including after the GreenSky board makes an adverse recommendation change;

 

•

the voting agreement, which provides that if the GreenSky board makes an adverse recommendation change, the obligations of Mr. Zalik and his affiliates party thereto to vote all of their shares of GreenSky common stock in favor of the approval of the GreenSky merger proposal shall be reduced to the aggregate number of shares representing voting power with respect to 35% of the total voting power of the outstanding shares of GreenSky common stock. See the section entitled “The Mergers—Voting Agreement” beginning on page 99 of this proxy statement/prospectus; and

 

•

for the GreenSky board, the separate review by the GreenSky special committee, with their financial and legal advisors, of the merger agreement and other transaction documents, and the recommendation delivered by the GreenSky special committee to the GreenSky board that the GreenSky board should approve and adopt the merger agreement and related agreements, as described above in the section entitled “—Background of the Transactions.”

In the course of their respective deliberations, the GreenSky board and the GreenSky special committee also considered a variety of risks, uncertainties and other countervailing factors related to the mergers, including, but not limited to (not necessarily in order of relative importance):

 

•

that, following the completion of the mergers, GreenSky would no longer exist as an independent public company and GreenSky stockholders would no longer be able to directly participate in any future earnings growth GreenSky might have achieved solely through GreenSky’s stand-alone strategic plan, and will only

 

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be able to indirectly participate in any future earnings growth of the GreenSky business through their ownership of GS Group common stock;

 

•

that, because the merger consideration is a fixed exchange ratio of shares of GS Group common stock for each eligible share of GreenSky Class A common stock and Common Unit and the merger agreement does not provide for any adjustment of the merger consideration or a value-based termination right if the market price of GS Group common stock declines prior to the consummation of the mergers, holders of GreenSky Class A common stock and Common Units could receive GS Group common stock worth less than the implied value of $12.28 per share (based on the closing trading prices of GreenSky Class A common stock and GS Group common stock on September 13, 2021) as of the consummation of the mergers;

 

•

that former GreenSky stockholders are expected to own less than [—]% of the outstanding GS Group common stock after the consummation of the transaction (ignoring any shares of GS Group common stock they may already own) and accordingly will have limited ability to directly influence GS Group’s corporate affairs;

 

•

the risk that one or more of GreenSky’s existing bank partners may cease providing funding for loans originated through the GreenSky program during the period between signing the merger agreement and consummation of the mergers;

 

•

the risk that the requisite regulatory approvals might not be obtained and, as a result, the mergers might not be consummated;

 

•

the risk that a different strategic alternative potentially could be more beneficial to GreenSky stockholders than the transaction;

 

•

the risk that the provisions of the merger agreement that restrict GreenSky’s ability to solicit, participate in, facilitate, discuss, negotiate or furnish information in connection with alternative acquisition proposals, subject to certain exceptions, would dissuade third parties from making or consummating an alternative acquisition proposal for GreenSky, including that:

 

•

GreenSky will be required to afford GS Group certain match rights prior to the GreenSky board being able to make an adverse recommendation change;

 

•

GreenSky will not be able to terminate the merger agreement to accept a superior proposal even if the GreenSky board makes an adverse recommendation change and will instead, absent the valid termination of the merger agreement for another reason, still need to submit the merger agreement to GreenSky stockholders for adoption at the special meeting; and

 

•

GS Group will be entitled to the termination fee of $75 million in specified circumstances, as described more fully in the section entitled “The Merger Agreement—Termination Fee”;

 

•

the significant costs incurred by GreenSky in connection with negotiating and entering into the merger agreement, which, if the transaction is not consummated, will generally be borne by GreenSky;

 

•

that the announcement or pendency of the transaction may impede GreenSky’s ability to retain and hire key personnel and its ability to maintain relationships with its bank partners, merchants, sponsors of merchants and other business partners or negatively impact its operating results and business generally;

 

•

that matters relating to the mergers, including integration planning, may require substantial commitments of time and resources by GreenSky’s senior management and employees and may divert the attention of senior management and employees, which may affect GreenSky’s business operations;

 

•

the risks and challenges inherent in the combination of two businesses, including the potential for unforeseen difficulties in integrating operations;

 

•

that, if the transaction is completed, the mergers will bind all GreenSky stockholders, including those who did not vote to adopt the merger agreement at the special meeting, and that appraisal rights will not be available to the holders of GreenSky Class A common stock and Common Units in connection with the mergers;

 

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•

the risk of litigation in connection with the mergers;

 

•

the risk that governmental entities may impose conditions on GS Group that may adversely affect the ability of GS Group to realize the expected benefits of the mergers;

 

•

that provisions in the merger agreement placing certain restrictions on the operation of GreenSky’s business during the period between the signing of the merger agreement and consummation of the mergers may delay or prevent GreenSky from pursuing business opportunities that may arise or other actions it would otherwise take with respect to its operations;

 

•

that GreenSky and GS Group may be obligated to consummate the mergers without having obtained appropriate consents, approvals or waivers from the counterparties under certain of GreenSky’s contracts that require consent or approval prior to the consummation of the mergers, and the risk that such consummation could trigger the termination of, or default under, such contracts or the exercise of rights by the counterparties under such contracts; and

 

•

various other risks associated with the mergers and the businesses of GreenSky and GS Group, as described more fully in the section entitled “Risk Factors” beginning on page 30 of this proxy statement/prospectus.

The GreenSky board determined that, overall, these potential risks and uncertainties were outweighed by the benefits that the GreenSky board expects to achieve for GreenSky stockholders as a result of the mergers. The GreenSky board realized that there can be no assurance about future results, including results considered or expected as disclosed in the foregoing reasons.

In addition, the GreenSky board was aware of and considered the interests of its directors and executive officers that may be different from, or in addition to, the interests of GreenSky stockholders generally when approving and adopting the merger agreement and recommending that GreenSky stockholders vote to approve the GreenSky merger proposal. For more information, see the section entitled “The Mergers—Interests of GreenSky’s Directors and Executive Officers in the Mergers” beginning on page 94 of this proxy statement.

The foregoing discussion of the information and factors that the GreenSky board and the GreenSky special committee considered is not intended to be exhaustive, but is meant to include the material factors regarding the transaction that the GreenSky board and the GreenSky special committee considered, which are not necessarily presented in order of relative importance. In light of the complexity and wide variety of factors that the GreenSky board and the GreenSky special committee considered, the GreenSky board and the GreenSky special committee did not find it practical to, and did not attempt to, quantify, rank or otherwise assign relative or specific weights or values to any of the factors considered and did not undertake to make any specific determinations as to whether any particular factor, or any aspect of any particular factor, was favorable or unfavorable to the ultimate determination of the GreenSky board or the GreenSky special committee, as applicable. Rather, the GreenSky board and the GreenSky special committee each made its recommendation based on the totality of the information available to the GreenSky board and the GreenSky special committee, as applicable. In addition, individual members of the GreenSky board and the GreenSky special committee may have given different weights to different factors.

The foregoing description of the GreenSky board’s and the GreenSky special committee’s consideration of the factors supporting the mergers is forward-looking in nature. This information should be read in light of the factors discussed in the section entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 28 of this proxy statement/prospectus.

ACCORDINGLY, THE GREENSKY BOARD RECOMMENDS THAT HOLDERS OF GREENSKY COMMON STOCK VOTE “FOR” THE GREENSKY MERGER PROPOSAL, “FOR” THE NON-BINDING COMPENSATION PROPOSAL AND “FOR” THE ADJOURNMENT PROPOSAL.

 

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Certain Unaudited Financial Information

Although GreenSky has periodically issued limited financial guidance to investors, GreenSky does not as a matter of course publicly disclose financial forecasts or projections as to future results of its operations due to, among other reasons, the uncertainty, unpredictability and subjectivity of the underlying assumptions and estimates. However, in July 2021, as part of the development of GreenSky’s long-term plan and in connection with GreenSky’s review of strategic alternatives, including a potential sale of GreenSky, GreenSky’s senior management prepared certain unaudited prospective financial information for fiscal years 2021 through 2023 (the “GreenSky 2021-2023 outlook”). The GreenSky 2021-2023 outlook was provided to the GreenSky board, the GreenSky special committee, J.P. Morgan, Piper Sandler and certain third parties potentially interested in a transaction with GreenSky, including GS Group and Financial Sponsor D. In August 2021, in connection with GS Group’s and Financial Sponsor D’s respective due diligence processes, GreenSky senior management prepared a sensitivity analysis of certain line items from the GreenSky 2021-2023 outlook for fiscal year 2021 based on actual results through August 2021 and a range of full-year transaction volumes (the “GreenSky 2021 update/sensitivity analysis”). The GreenSky 2021 update/sensitivity analysis was provided to the GreenSky board, the GreenSky special committee, J.P. Morgan, Piper Sandler, GS Group and Financial Sponsor D. Based on the GreenSky 2021-2023 outlook and certain assumptions provided by GreenSky senior management, J.P. Morgan and Piper Sandler extrapolated certain unaudited prospective financial information of GreenSky for fiscal years 2024 and 2025, which extrapolations were approved for use by J.P. Morgan and Piper Sandler by GreenSky senior management (such extrapolations, together with the GreenSky 2021-2023 outlook, (solely with respect to Piper Sandler’s opinion and financial analyses) the GreenSky 2021 update/sensitivity analysis and (solely with respect to J.P. Morgan’s opinion and financial analyses) the GreenSky unlevered free cash flows (as defined below), collectively, the “GreenSky forecasts”). The GreenSky board (in the case of J.P. Morgan), the GreenSky special committee (in the case of Piper Sandler) and GreenSky senior management, authorized and directed J.P. Morgan and Piper Sandler, as applicable, to use and rely on the GreenSky forecasts in connection with their respective financial analyses and opinions, to the extent applicable, as described in the sections entitled “The Mergers—Opinion of J.P. Morgan, GreenSky’s Financial Advisor” and “The Mergers—Opinion of Piper Sandler, GreenSky Special Committee’s Financial Advisor” beginning on pages 76 and 82, respectively, of this proxy statement/prospectus.

The GreenSky forecasts are presented in this proxy statement/prospectus solely to give GreenSky stockholders access to the information that was made available to the GreenSky board, the GreenSky special committee, their respective financial advisors and certain third parties potentially interested in a transaction with GreenSky, including GS Group and Financial Sponsor D, to the extent described above. GS Group’s internal financial forecasts were not provided to GreenSky, J.P. Morgan or Piper Sandler, given that GreenSky stockholders were expected to own less than [—]% of the outstanding GS Group common stock following the consummation of the mergers and the existence of a material liquid market for GS Group common stock. Accordingly, no internal GS Group forecasts were relied upon by the GreenSky board or the GreenSky special committee in their respective evaluations of the mergers or by J.P. Morgan or Piper Sandler for purposes of their respective financial analyses and fairness opinions.

The GreenSky forecasts were not prepared with a view toward public disclosure or with a view toward complying with GAAP, the published guidelines of the SEC regarding projections or the guidelines established by the American Institute of Certified Public Accountants for the preparation and presentation of prospective financial information. The GreenSky forecasts included herein were prepared by, and are the responsibility of, GreenSky’s management. PricewaterhouseCoopers LLP has not audited, reviewed, examined, compiled nor applied agreed-upon procedures with respect to the GreenSky forecasts and, accordingly, PricewaterhouseCoopers LLP does not express an opinion or any other form of assurance with respect thereto. The PricewaterhouseCoopers LLP report incorporated herein by reference relates to GreenSky’s previously issued financial statements. The report does not extend to the GreenSky forecasts and should not be read to do so.

 

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The GreenSky forecasts are subjective in many respects and thus subject to interpretation. While presented with numerical specificity, the GreenSky forecasts reflect numerous estimates and assumptions made by GreenSky senior management at the time such prospective financial information was prepared that are difficult to predict and that are beyond GreenSky’s control and are subject to change. Specifically, the GreenSky 2021-2023 outlook was prepared by GreenSky senior management at the direction of the GreenSky board to include only those existing GreenSky revenue streams deemed proven, and thus did not incorporate future revenues and related costs associated with financial products and lines of business contemplated to be launched in the future. The assumptions and estimates underlying the GreenSky forecasts are inherently uncertain and are subject to a wide variety of significant business, economic, competitive and other risks and uncertainties that could cause actual results to differ materially from those contained in the GreenSky forecasts, including, among others, risks and uncertainties relating to GreenSky’s business (including its ability to achieve strategic goals, objectives and targets over applicable periods); industry performance; the regulatory and competitive environment; general global business and economic conditions and other matters described in the sections entitled “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors” beginning on pages 28 and 30, respectively, of this proxy statement/prospectus and Part I, Item 1A in GreenSky’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, which is incorporated by reference into this proxy statement/prospectus. Some or all of the estimates and assumptions underlying the GreenSky forecasts may have changed since the date the GreenSky forecasts were prepared.

Accordingly, GreenSky cannot assure readers that the GreenSky forecasts are necessarily predictive of the future performance of GreenSky, and actual results will likely vary from those presented in such prospective financial information and such variances may be material. Additionally, the GreenSky forecasts cover a number of years into the future and such information by its nature becomes less predictive with each successive year. The inclusion of the GreenSky forecasts in this proxy statement/prospectus should not be regarded as a representation by any person that the results contained in the GreenSky forecasts would be achieved or that the results achieved would not exceed those reflected in the GreenSky forecasts, if the transaction is not consummated.

The GreenSky forecasts were developed for GreenSky on a stand-alone basis without giving effect to the transaction or entry into the merger agreement, including any potential synergies that may be achieved as a result of the mergers, any changes to GreenSky’s strategy or operations that may be implemented after the consummation of the mergers or any costs incurred in connection with the mergers. Neither the GreenSky board nor the GreenSky special committee quantified synergies that may be achieved as a result of the mergers. Furthermore, the GreenSky forecasts did not take into account the effect of any failure of the mergers to be consummated and should not be viewed as relevant or continuing in that context.

The GreenSky forecasts include non-GAAP financial measures. These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and may not be comparable to similarly titled measures used by other companies. Financial measures included in projections provided to a financial advisor and a board of directors in connection with a business combination transaction are excluded from the definition of “non-GAAP financial measures” under the rules of the SEC, and therefore such financial measures are not subject to SEC rules regarding disclosures of non-GAAP financial measures, which may otherwise require a reconciliation of a non-GAAP financial measure to a GAAP financial measure. Reconciliations of non-GAAP financial measures were not provided to and were not relied on by J.P. Morgan or Piper Sandler for purposes of their respective financial analyses and opinions or by the GreenSky board or the GreenSky special committee in connection with their respective consideration of the mergers, nor were they provided to GS Group. Accordingly, GreenSky has not provided a reconciliation of these non-GAAP financial measures.

GreenSky does not intend to update or otherwise revise the GreenSky forecasts after the date of this proxy statement/prospectus to reflect circumstances existing since their preparation or to reflect the occurrence of unanticipated events, even in the event that any or all of the underlying assumptions are shown to be in error, or to reflect changes in general economic or industry conditions.

 

 

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By including the GreenSky forecasts in this proxy statement/prospectus, neither GreenSky nor GS Group nor any of their respective directors, officers, employees, advisors or other representatives has made or makes any representation to any person regarding the ultimate performance of GreenSky compared to the information contained in the GreenSky forecasts. Accordingly, the GreenSky forecasts should not be construed as financial guidance, nor relied on as such. The GreenSky forecasts are not included in this proxy statement/prospectus in order to induce any GreenSky stockholder to vote in favor of the proposals contained in this proxy statement/prospectus or to influence any GreenSky stockholder or any other person to make any investment decision with respect to the transaction or otherwise, but rather solely because the GreenSky forecasts or portions thereof were made available to the GreenSky board, the GreenSky special committee, their respective financial advisors and certain third parties potentially interested in a transaction with GreenSky, including GS Group and Financial Sponsor D, to the extent described above. For the reasons described above, readers of this proxy statement/prospectus are cautioned not to place undue, if any, reliance on the GreenSky forecasts. GreenSky has not made any representation and warranties in the merger agreement concerning the GreenSky forecasts.

The following table sets forth a summary of the GreenSky 2021-2023 outlook and the extrapolations described above for fiscal years 2024 and 2025:

 

		Fiscal year ended December 31,
($ in millions)		2021E (1)				2022E				2023E				2024E (2)				2025E (3)
		GreenSky 2021-2023 outlook												Extrapolation
Transaction volume		$	6,045			$	6,936			$	7,810			$	8,200			$	8,446
Total revenue			536				585				670				703				724
Gross profit			299				341				371				389				401
Net income			107				131				147				155				159
Adjusted EBITDA(4)			173				199				218				229				236

 

(1)

Piper Sandler performed certain of the analyses related to its fairness opinion rendered to the GreenSky special committee based on the midpoint of the GreenSky 2021 update/sensitivity analysis, based on which Piper Sandler arithmetically derived, which derivations were approved for use by GreenSky senior management, fiscal year 2021 transaction volume of $5,945 million, total revenue of $525 million, gross profit of $305 million, net income of $120 million and adjusted EBITDA of $183 million.

(2)	Fiscal year 2024 results were extrapolated by J.P. Morgan and Piper Sandler from the GreenSky 2021-2023 outlook by assuming top-line growth of 5% in fiscal year 2024, which extrapolations were approved for use by GreenSky senior management.

(3)

Fiscal year 2025 results were extrapolated from the GreenSky 2021-2023 outlook by J.P. Morgan by assuming top-line growth of 3% in fiscal year 2025, which extrapolations were approved for use by GreenSky senior management. Based on extrapolations assuming top-line growth of 5% in fiscal year 2025, which extrapolations were approved for use by GreenSky senior management, Piper Sandler arithmetically derived fiscal year 2025 transaction volume of $8,610 million, total revenue of $738 million, gross profit of $409 million, net income of $163 million and adjusted EBITDA of $241 million.

(4)	Adjusted EBITDA, a non-GAAP financial measure, refers to net income before interest, tax, depreciation and amortization, adjusted to eliminate equity-based compensation and payments and certain non-cash and non-recurring expenses.

 

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The following table sets forth a summary of the GreenSky 2021 update/sensitivity analysis:

 

		Fiscal year ended December 31, 2021E at transaction volume of:
($ in millions)		$5.8 billion				$6.0 billion
Total revenue		$	515			$	534
Net income			117	(2)			122	(3)
Adjusted EBITDA (1)			173	(2)			193	(3)

 

(1)	Adjusted EBITDA, a non-GAAP financial measure, refers to net income before interest, tax, depreciation and amortization, adjusted to eliminate equity-based compensation and payments and certain non-cash and non-recurring expenses.

(2)	Represents the midpoint net income range of $100 million to $133 million and midpoint adjusted EBITDA range of $166 million to $180 million, as arithmetically derived by GreenSky senior management.

(3)	Represents the midpoint net income range of $115 million to $129 million and midpoint adjusted EBITDA range of $185 million to $200 million, as arithmetically derived by GreenSky senior management.

The following table sets forth a summary of certain unaudited prospective unlevered free cash flows (as defined below) of GreenSky for fiscal years 2022 through 2025 and a terminal year (the “GreenSky unlevered free cash flows”), as arithmetically derived by J.P. Morgan, which derivations were approved for use by GreenSky senior management, based on the GreenSky 2021-2023 outlook, the extrapolations by J.P. Morgan described above for fiscal years 2024 and 2025 and terminal year metrics provided by GreenSky senior management.

 

		Fiscal year ended December 31,																Terminal Year
($ in millions)		2022E				2023E				2024E				2025E
Unlevered free cash flows (1)		$	126			$	131			$	139			$	146			$	150

 

(1)

Unlevered free cash flows, a non-GAAP financial measure, refers to EBIT less tax, plus depreciation and amortization, less capital expenditures, plus change in finance charge reversal liability and less change in restricted cash. EBIT, a non-GAAP financial measure, refers to adjusted EBITDA, less depreciation and amortization. Unlevered free cash flows were not calculated for fiscal year 2021.

Opinion of J.P. Morgan, GreenSky’s Financial Advisor

Pursuant to an engagement letter, GreenSky retained J.P. Morgan as its financial advisor in connection with the proposed mergers.

At the meeting of the GreenSky board on September 14, 2021, J.P. Morgan rendered its oral opinion, which was subsequently confirmed in writing by J.P. Morgan’s written opinion dated as of September 14, 2021, to the GreenSky board that, as of such date and based upon and subject to the factors and various assumptions made, procedures followed, matters considered, and limitations and qualifications set forth in its written opinion, the exchange ratio in the proposed company merger was fair, from a financial point of view, to the holders of GreenSky Class A common stock.

The full text of the written opinion of J.P. Morgan, dated as of September 14, 2021, which sets forth, among other things, the assumptions made, matters considered and limits on the review undertaken, is attached as Annex B to this proxy statement/prospectus and is incorporated herein by reference. The summary of the opinion of J.P. Morgan set forth in this proxy statement/prospectus is qualified in its entirety by reference to the full text of such opinion. Holders of GreenSky Class A common stock are urged to read the opinion in its entirety. J.P. Morgan’s written opinion was addressed to the GreenSky board (in its capacity as such) in connection with and for the purposes of its evaluation of the proposed

 

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