US payment processor Global is to exit the remittance market
with the sale of its DolEx and Europhil money transfer businesses
to an affiliate of US private equity firm Palladium Equity
Partners.
Subject to operating performance of the
businesses the deal is worth between $85 million and $110
million.
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The rationale behind the sales, said Global
Payments’ chairman and CEO Paul Garcia, is to enable the company to
focus exclusively on a strategy of expanding the international
merchant acquiring side of its operations.
“We intend to reinvest the sale proceeds in
future merchant acquiring growth opportunities,” said Garcia.
Clearly not in keeping with this strategy,
DolEx provides remittance service between the US and Latin America
while Europhil focuses on the Europe-Latin American channel. The
two business have a total of 793 branches and some 12,000
settlement locations.
Global has built an especially strong
relationship with UK bank HSBC, including acquisition of a 51
percent stake in HSBC’s UK merchant acquiring business in June 2008
for $439 million.
In June 2009 Global acquired HSBC’s 49 percent
stake in this joint venture (JV) for $307.7 million.
In addition, Global has a 56 percent stake in
another major JV with HSBC, Global Payments Asia-Pacific, which has
operations in Brunei, Hong Kong, India, Macau, China, Malaysia,
Maldives, Singapore, the Philippines, Sri Lanka and Taiwan.
Excluding the money transfer segment, Global
anticipates that in its financial year to 31 May 2010, its revenue
will increase by 7 percent to 10 percent to between $1.565 billion
and $1.615 billion, while earnings per share from continuing
operations will increase by 10 percent to 15 percent.
