Business Unit Represents Approximately 7% of
Company Revenue
Divestiture Will Support Western Union’s
Strategic Focus on its Global Cross-Border Payments Platform and
Digital Capabilities
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.
Safe Harbor Compliance Statement for Forward-Looking
Statements
This press release contains certain statements that are
forward-looking within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are not guarantees
of future performance and involve certain risks, uncertainties, and
assumptions that are difficult to predict. Actual outcomes and
results may differ materially from those expressed in, or implied
by, our forward-looking statements. Words such as "expects,"
"intends," "targets," "anticipates," "believes," "estimates,"
"guides," "provides guidance," "provides outlook," and other
similar expressions or future or conditional verbs such as "may,"
"will," "should," "would," "could," and "might" are intended to
identify such forward-looking statements. Readers of this press
release of The Western Union Company (the "Company," "Western
Union," "we," "our," or "us") should not rely solely on the
forward-looking statements and should consider all uncertainties
and risks discussed in the Risk Factors section and throughout the
Annual Report on Form 10-K for the year ended December 31, 2020.
The statements are only as of the date they are made, and the
Company undertakes no obligation to update any forward-looking
statement.
Possible events or factors that could cause results or
performance to differ materially from those expressed in our
forward-looking statements include the following: (i) events
related to our business and industry, such as: changes in general
economic conditions and economic conditions in the regions and
industries in which we operate, including global economic downturns
and trade disruptions, or significantly slower growth or declines
in the money transfer, payment service, and other markets in which
we operate, including downturns or declines related to
interruptions in migration patterns or other events, such as public
health emergencies, epidemics, or pandemics such as COVID-19, civil
unrest, war, terrorism, or natural disasters, or non-performance by
our banks, lenders, insurers, or other financial services
providers; failure to compete effectively in the money transfer and
payment service industry, including among other things, with
respect to price, with global and niche or corridor money transfer
providers, banks and other money transfer and payment service
providers, including digital, mobile and internet-based services,
card associations, and card-based payment providers, and with
digital currencies and related protocols, and other innovations in
technology and business models; political conditions and related
actions, including trade restrictions and government sanctions, in
the United States and abroad, which may adversely affect our
business and economic conditions as a whole, including
interruptions of United States or other government relations with
countries in which we have or are implementing significant business
relationships with agents, clients, or other partners;
deterioration in customer confidence in our business, or in money
transfer and payment service providers generally; failure to
maintain our agent network and business relationships under terms
consistent with or more advantageous to us than those currently in
place; our ability to adopt new technology and develop and gain
market acceptance of new and enhanced services in response to
changing industry and consumer needs or trends; changes in, and
failure to manage effectively, exposure to foreign exchange rates,
including the impact of the regulation of foreign exchange spreads
on money transfers and payment transactions; any material breach of
security, including cybersecurity, or safeguards of or
interruptions in any of our systems or those of our vendors or
other third parties; cessation of or defects in various services
provided to us by third-party vendors; mergers, acquisitions, and
the integration of acquired businesses and technologies into our
Company, divestitures, and the failure to realize anticipated
financial benefits from these transactions, and events requiring us
to write down our goodwill; decisions to change our business mix;
our ability to realize the anticipated benefits from
restructuring-related initiatives, which may include decisions to
downsize or to transition operating activities from one location to
another, and to minimize any disruptions in our workforce that may
result from those initiatives; failure to manage credit and fraud
risks presented by our agents, clients, and consumers; changes in
tax laws or their interpretation, any subsequent regulation, and
potential related state income tax impacts, and unfavorable
resolution of tax contingencies; adverse rating actions by credit
rating agencies; our ability to protect our trademarks, patents,
copyrights, and other intellectual property rights and to defend
ourselves against potential intellectual property infringement
claims; our ability to attract and retain qualified key employees
and to manage our workforce successfully; material changes in the
market value or liquidity of securities that we hold; restrictions
imposed by our debt obligations; (ii) events related to our
regulatory and litigation environment, such as: liabilities or loss
of business resulting from a failure by us, our agents, or their
subagents to comply with laws and regulations and regulatory or
judicial interpretations thereof, including laws and regulations
designed to protect consumers, or detect and prevent money
laundering, terrorist financing, fraud, and other illicit activity;
increased costs, operational burden or loss of business due to
regulatory initiatives and changes in laws, including changes in
interpretations, resulting in increasing regulations and industry
practices and standards in the United States and abroad, affecting
us, our agents, or their subagents, our external business partners
such as financial institutions, or the banks with which we or our
agents maintain bank accounts needed to provide our services,
including related to anti-money laundering regulations, anti-fraud
measures, our licensing arrangements, customer due diligence, agent
and subagent due diligence, registration and monitoring
requirements, consumer protection requirements, remittances, and
immigration; liabilities, increased costs or loss of business and
unanticipated developments resulting from governmental
investigations and consent agreements with or enforcement actions
by regulators; liabilities resulting from litigation, including
class-action lawsuits and similar matters, and regulatory
enforcement actions, including costs, expenses, settlements, and
judgments; failure to comply with regulations and evolving industry
standards regarding consumer privacy, data use, the transfer of
personal data between jurisdictions, and information security,
including with respect to the General Data Protection Regulation in
the European Union and the California Consumer Privacy Act; failure
to comply with the Dodd-Frank Wall Street Reform and Consumer
Protection Act, as well as regulations issued pursuant to it and
the actions of the Consumer Financial Protection Bureau and similar
legislation and regulations enacted by other governmental
authorities in the United States and abroad related to consumer
protection and derivative transactions; effects of unclaimed
property laws or their interpretation or the enforcement thereof;
failure to maintain sufficient amounts or types of regulatory
capital or other restrictions on the use of our working capital to
meet the changing requirements of our regulators worldwide; changes
in accounting standards, rules and interpretations, or industry
standards affecting our business; and (iii) other events, such as:
catastrophic events; and management’s ability to identify and
manage these and other risks.
WU-G
About Western Union
The Western Union Company (NYSE: WU) is a global leader in
cross-border, cross-currency money movement and payments. Western
Union’s platform provides seamless cross-border flows and its
leading global financial network bridges more than 200 countries
and territories and over 130 currencies. We connect businesses,
financial institutions, governments, and consumers through one of
the world’s widest reaching networks, accessing billions of bank
accounts, millions of digital wallets and cards, and more than
550,000 retail locations. Western Union connects the world to bring
boundless possibilities within reach. For more information, visit
www.westernunion.com.
____________________________
1 The global definitive agreement currently excludes France and
Lithuania. Western Union and the Goldfinch and Baupost consortium
have entered into exclusive negotiations regarding the proposed
sale of Western Union's French and Lithuanian Western Union
Business Solutions operations. No decision has been made at this
stage in those jurisdictions and is subject to consultation with
employee representative bodies in accordance with local law.
2 Estimated net proceeds are based on current tax policy and are
subject to certain regulatory and working capital adjustments
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Western Union
Media Relations: Claire Treacy +1 (720) 332-0652
Claire.Treacy@westernunion.com
Investor Relations: Brad Windbigler +1 720-332-2510
Brad.Windbigler@westernunion.com
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