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Goldman (GS) Arm Signs All-Cash Deal to Buy People Corporation

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Zacks Equity Research
·3 min read
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The Goldman Sachs Group’s GS merchant banking division has agreed to acquire People Corporation in an all-cash transaction. The deal, subject to shareholders’ approval, is expected to close in the first quarter of 2021.

The purchase price has been fixed at $15.22 per share, representing a total equity value of nearly $1.13 billion. Notably, the transaction value represents a 36% premium to the closing price on Dec 11, 2020. Also, it is likely to be financed through a combination of committed debt and equity financing.

Per the agreed terms, the transaction will be implemented by way of a plan of arrangement under the Business Corporations Act (Ontario). Also, directors and the senior management team have entered into customary agreements to vote their shares in favor of the deal in a special meeting expected to be held in February 2021.

Laurie Goldberg, executive chairman and CEO of People Corporation, and the rest of the senior management team have agreed to roll a portion of their equity for shares of an entity controlled by Goldman.

Anthony Arnold, managing director at Goldman Sachs, said, "The Company has a compelling client offering with experienced consultants and a national scale that have helped deliver outstanding organic growth over time. There is also a continued and meaningful investment opportunity to deploy capital and access opportunities in People Corporation’s core and adjacent markets.”

Both the companies follow a similar strategy to grow organically and through acquisitions. People Corporation will continue to be led by Goldberg and the current senior leadership team. Also, the deal is expected to make no changes in the acquired company’s personnel, service model and standards, or operating principles.

In the past six months, shares of Goldman have appreciated 17.6% compared with 30.6% growth registered by the industry.

Currently, Goldman has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In fourth-quarter 2020, several major banks have entered into acquisition deals, thereby bolstering their growth prospects after facing slowdown for most of 2020, due to the pandemic.

Recently, Huntington Bancshares HBAN entered into an all-stock acquisition deal with Detroit-based TCF Financial TCF, per which both will merge. On completion, the combined entity, with market valuation of $22 billion, will be listed as one of the top 10 U.S. regional banks, along with ranking fifth in approximately 70% of deposit markets.

Also, Truist Financial’s TFC indirect subsidiary, Truist Insurance Holdings, acquired Wellington Risk Holdings, Inc.

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