US-based cross-border payments company MoneyGram International has signed a definitive agreement to be acquired by private equity firm Madison Dearborn Partners (MDP).
Under the terms of the agreement, funds affiliated with MDP will acquire all outstanding shares of MoneyGram for $11 per share in an all-cash transaction valued at around $1.8bn.
Also, MDP will refinance MoneyGram’s outstanding debt of $799m.
The transaction price represents around a 50% premium to MoneyGram’s closing stock price as on 14 December 2021, the last trading day prior to the announcement.
MoneyGram chairman and CEO Alex Holmes said: “We are excited to enter into this transaction with MDP, which will deliver immediate and compelling value to shareholders and enable us to accelerate the advancement of our digital growth strategy.
“This transaction is the culmination of a thorough process by the MoneyGram Board to enhance shareholder value while positioning our business for continued growth and expansion.
“MoneyGram has undergone a rapid transformation over the last several years to expand our digital capabilities and adapt to the evolving needs of our customers.”
The acquisition is expected to complete in the fourth quarter of 2022, subject to customary closing conditions including certain regulatory and MoneyGram shareholders’ approvals.
Upon closing of the transaction, MoneyGram is planned to become a private company and where its shares will be delisted from public markets.
Upon closing of the transaction, the payments company will continue to operate under the MoneyGram brand, led by Alex Holmes and its existing management team, from its headquarters in Dallas, Texas.
Goldman Sachs & Co., Deutsche Bank Securities and Barclays supported MDP by providing committed debt financing for the transaction.
BofA Securities served as an exclusive financial advisor, Vinson & Elkins as legal counsel and Paul Hastings as financial services regulatory counsel to MoneyGram on the transaction.
Goldman Sachs & Co. served as a lead financial advisor, Deutsche Bank Securities, Barclays and J.P. Morgan Securities as financial advisors to MDP.
MDP financial and transaction services team managing director Vahe Dombalagian said: “MoneyGram is a leader in cross-border payments with one of the strongest brands and reputations in the industry, and we are excited to partner with Alex and his leadership team as they continue to lead MoneyGram’s digital growth strategy.
“We are looking forward to applying our substantial experience growing digital businesses and deep payments knowledge to help MoneyGram further strengthen its market-leading cross-border capabilities and enhance its digital platform.
“Alex and his team have transformed MoneyGram over the past few years, and we are excited to help them execute the important work ahead to continue evolving and growing MoneyGram’s business.”
