Saturday, April 1

Buyout firm Madison Dearborn to take MoneyGram private in $1.8 bln deal

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Private equity firm Madison Dearborn Partners said on Tuesday it would buy MoneyGram International Inc in a $1.8 billion deal, seeking to turn around the fortunes of the debt-laden money transfer platform buffeted by stiff competition.

Funds affiliated with Madison will acquire MoneyGram for $11 per share, a 23% premium to the stock’s close on Monday. The offer is also 50% higher than the closing price of MoneyGram shares on Dec. 14, a day before media speculation on the deal .

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The Dallas-based company, with nearly $800 million in net debt and more than 150 million customers, became an acquisition target as it struggled to capture the growing market for payments and remittances amid competition rivals such as Remitly Global Inc and Western Union Co.

MoneyGram had initially received a $10.50 per share offer from Madison, as well as competing bids from Siris Capital Group LLC and Advent International Corp, Reuters reported last month.

It had engaged with potential buyers several times in the last few years, including in 2018 when its $1.2 billion sale to China’s Ant Financial fell through because of the US government’s concerns over national security.

Madison will refinance MoneyGram’s outstanding debt after the deal closes, which is expected in the fourth quarter of this year.

Goldman Sachs & Co, Deutsche Bank Securities Inc and Barclays provided debt financing for the deal, the companies said. (Reporting by Niket Nishant in Bengaluru; Editing by Aditya Soni)