MoneyGram International, Inc., based in Dallas, is being acquired by Madison Dearborn Partners (MDP) in a $1.8 billion deal.
In a press release issued on February 15, Moneygram said the agreement with Madison Dearborn Partners, a Chicago investment firm, will help accelerate MoneyGram’s push into the digital payment space.
The deal also gives MoneyGram’s board of directors a “go-shop” period, in which they will have until March 16 to seek out or consider other offers. Madison Dearborn Partners will acquire all outstanding shares of MoneyGram for $11.00 per share in an all-cash transaction. On Monday, MoneyGram’s closing price was $8.95 per share.
“We are excited to enter into this transaction with MDP, which will deliver immediate and compelling value to shareholders and enable us to accelerate the advancement of our digital growth strategy,” said MoneyGram Chairman and CEO Alex Holmes in a statement. “This transaction is the culmination of a thorough process by the MoneyGram Board to enhance shareholder value while positioning our business for continued growth and expansion.”
The agreement was unanimously approved by the MoneyGram board of directors. Upon the closing of the transaction, MDP will refinance MoneyGram’s outstanding debt of $799 million as of December 31, 2021. The transaction is expected to close in the fourth quarter of 2022. Once all steps are complete, MoneyGram will become a private company, and its shares will no longer be listed on public markets.
During the “go-shop” period, MoneyGram will have 30 days to actively initiate, solicit, encourage, and evaluate any alternative proposals from other companies for acquisition. They will have the right to terminate the agreement with MDP to enter negotiations with any parties offering an alternative proposal.
After the transaction closes and the “go-shop” period has passed, MoneyGram will continue to operate out of its headquarters in Dallas and will maintain the same brand name. The same existing leadership will remain in place, including CEO Alex Holmes.
“MoneyGram is a leader in cross-border payments with one of the strongest brands and reputations in the industry, and we are excited to partner with Alex and his leadership team as they continue to lead MoneyGram’s digital growth strategy,” said Vahe Dombalagian, the managing director on MDP’s Financial and Transaction Services team. “We are looking forward to applying our substantial experience growing digital businesses and deep payments knowledge to help MoneyGram further strengthen its market-leading cross-border capabilities and enhance its digital platform. We are excited to help them execute the important work ahead.”