The Western Union Company (NYSE: WU), a global leader in cross-border, cross-currency money movement and payments, together with Goldfinch Partners, LLC (“Goldfinch”), a private equity firm investing in businesses at the forefront of digital transformation, and The Baupost Group, LLC (“Baupost”), a $31 billion Boston-based investment firm, today announced that they have entered into a definitive agreement, under which a consortium of Goldfinch and Baupost will acquire Western Union Business Solutions for approximately $910 million in cash.
Western Union established Western Union Business Solutions following the acquisitions of Custom House in 2009 and Travelex Global Business Payments in 2011. Western Union Business Solutions, which facilitates cross-border, cross-currency payments and foreign exchange solutions for small and medium-sized businesses and other organizations, represented approximately 7% of total Western Union revenue during the last 12 months ended June 30, 2021.
“With this divestiture, Western Union will be fully focused on maximizing the strength of our global cross-border payments platform and financial network,” said Hikmet Ersek, President and CEO of Western Union.
“We are excited to build upon our global leadership position in consumer money movement, underpinned by our iconic Western Union brand and, in addition to this, continue to serve as a global provider of innovative cross-border payment solutions for partners, like financial institutions, telecoms and technology companies. I am confident that the Western Union Business Solutions team, business and customers have found solid strategic and financial partners in Goldfinch and Baupost,” Ersek concluded.
With the planned sale of Western Union Business Solutions, Western Union will focus on increasing its penetration of the global cross-border consumer payments market and expanding its open platform strategy to serve multiple customer segments and use cases, including through digital partnerships. Furthermore, the Company plans to increase its total addressable market by offering additional services to its unique global consumer base through a Western Union-branded consumer ecosystem strategy.
The transaction is expected to close in two stages. In the first closing, which is expected to be completed in early 2022, Western Union Business Solutions, excluding the business that is operated through Western Union International Bank in the European Union and the United Kingdom, will transfer to an entity controlled by Goldfinch and Baupost. In the second closing, which is expected to be completed by late 2022, the remaining Western Union Business Solutions business operated through Western Union International Bank will transfer1.
Western Union expects to receive in excess of $800 million in proceeds, net of tax, from the transaction upon the first closing2. Following the transaction, the Company will evaluate options for the use of proceeds based on market conditions and opportunities, and in accordance with its established capital allocation priorities. These include:
Reinvestment in the business to drive organic growth;
Dividends;
Acquisitions, including technological capabilities that support our growth strategy; and
Share repurchases.
Both closings are subject to requisite works council and trade union consultations, regulatory approvals and other customary closing conditions.
Lazard Frères & Co. served as financial advisor, and Freshfields Bruckhaus Deringer LLP served as legal counsel to Western Union in the transaction.