US-based transaction processor Global Payments has agreed to sell its money transfer businesses to private-equity firm Palladium Equity Partners in a deal that could be worth up to $110 million.
Global Payments says it will use the proceeds of the sale of the the DolEx- and Europhil-branded money transfer units to invest in its core merchant acquiring business.
The businesses have over 700 branches in the United States and Europe, providing money transfer services for millions to destinations in Latin America, Morocco, and the Philippines.
Under the terms of the deal, Global Payments will receive between $85 million and $110 million, based on the operating performance of the business determined at the time of closing.
Paul Garcia, CEO, Global Payments, says: "This transaction will allow us to focus exclusively on our ongoing strategy of expanding our merchant acquiring presence around the world, and as such, we intend to reinvest the sale proceeds in future merchant acquiring growth opportunities."
The sale is subject to customary regulatory approvals including consent from the issuers of money transfer licenses in states and countries where DolEx and Europhil operate.
The firm plans to report the results of the money transfer business as discontinued operations. Excluding the segment, it expects full year fiscal 2010 revenue growth of between seven per cent and 10% or $1,565 million to $1,615 million. Full year diluted earnings per share are forecast to grow 10% to 15%, or $2.31 to $2.42.