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Goldman Sachs Acquiring Canadian Benefits Manager People Corporation

By Eric Volkman - Dec 15, 2020 at 5:38PM

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The white-shoe investment bank continues to diversify its business.

Never shy to open its wallet for an asset buy, Goldman Sachs ( GS 2.21% ) is reaching across our northern border for its latest acquisition. On Monday, Canada-based benefits manager and human resources specialist People Corporation announced that it has agreed to be purchased by the U.S. investment bank's Merchant Banking Division.

Goldman is paying 15.22 Canadian dollars ($11.93) per share for the company, which is a premium of 36% over People's closing stock price the trading day before the deal was announced. All told, according to People, the total equity value of the acquisition is around CA$1.13 billion ($886 million). 

Businessman seated at a desk handing over a check to an unseen peer.

Image source: Getty Images.

In its announcement, People quoted Goldman's managing director Anthony Arnold as saying that its asset-to-be "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."

No estimates were provided as to how the acquisition might affect Goldman's financials.

People itself has been a busy acquirer. Fueled by asset purchases of complementary businesses, the company's annual revenue for its fiscal 2020 rose by almost 30% on a year-over-year basis to just under CA$211 million ($165 million); of that percentage figure, 9% was organic growth. Non-IFRS (adjusted) net earnings more than doubled to CA$15 million ($11.8 million).

Goldman's shareholders seemed to welcome the acquisition, which feeds into the company's broader ambitions to expand its business into lucrative niche segments of the finance industry. On Tuesday, Goldman shares closed almost 2% higher, outpacing the rise of the S&P 500 index.

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