The Goldman Sachs Group, Inc. (GS – Analyst Report) plans to offer 6 million shares in the initial public offering of its specialty lending unit – Goldman Sachs BDC Inc. The financial bigwig said that it will list the unit’s shares on the New York Stock Exchange, under the ticker symbol “GSBD.â€
The company also plans to offer an overallotment option to the underwriters, which will allow underwriters to buy up to an additional 900,000 shares of common stock. As per a filing of the company, the price per share is expected in the range of $20–$21, which is likely to raise $123 million at the midpoint.
Goldman Sachs BDC intends to utilize the proceeds of the offering for repaying a part of its debt under senior secured revolving credit facility.
Formed in 2012, Goldman Sachs BDC is a business development company investing mainly in middle-market companies in the country. Since its inception till Dec 31, 2014, the company has originated over $1.27 billion in aggregate principal amount of debt and equity investments. It usually invests $5 million to $50 million in firms across different sectors with duration of 3 to 10 years.
The joint book running managers for the offering include Morgan Stanley (MS – Analyst Report), Citigroup Inc. (C – Analyst Report) and Credit Suisse Group AG (CS – Snapshot Report).
Amid heightened regulations in the financial sector and declining profits, we see Goldman’s latest move as a strategic one.
Goldman currently carries a Zacks Rank #3 (Hold).
