The Western Union Company has agreed to divest its Western Union Business Solutions to a consortium of private equity firm Goldfinch Partners and investment firm The Baupost Group for nearly $910m in cash.
The deal is expected to close in two stages.
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The first closing, expected in early 2022, will see the transfer of certain parts of Western Union Business Solutions to an entity controlled by Goldfinch and Baupost.
This transaction will not include the part of the business operated through Western Union International Bank in the European Union and the UK.
It will be transferred in the second closing, which is expected by late 2022.
Western Union anticipates more than $800m in proceeds, net of tax, from the deal upon the first closing.
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By GlobalDataThe company said that it will evaluate options for the use of proceeds based on market conditions and opportunities after the takeover.
Deal Rationale
Western Union Business Solutions was formed by Western Union following its takeover of Custom House in 2009 and Travelex Global Business Payments in 2011.
The business provides cross-border, cross-currency payments and foreign exchange solutions for small and medium-sized businesses and other organisations.
It accounted for nearly 7% of the total Western Union revenue during the last 12 months ended 30 June 2021.
According to Western Union president and CEO Hikmet Ersek, the divestiture will allow the company to maximise the strength of its global cross-border payments platform and financial network.
With the sale, the company intends to focus on accelerating its reach in the global cross-border consumer payments market.
It also plans to expand its open platform strategy to cater to various customer segments and use cases, including through digital partnerships.
Besides, Western Union looks to expand its total addressable market by offering new services through a Western Union-branded consumer ecosystem strategy.
Ersek said: “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.”
Recent Developments
In June this year, Western Union partnered with French budget management app Linxo to facilitate digital money transfers via its platform.
In May, the company signed a five-year international partnership with IRIS Software Group to offer simplified payroll and payments solutions globally.
The same month, it partnered with Korea Investment & Securities to offer Western Union consumer-to-consumer money transfers, through retail and digital channels in South Korea.
