Chicago-based private equity firm Madison Dearborn Partners (MDP) has completed its acquisition of MoneyGram, an American cross-border peer-to-peer payments company, slightly over a year after announcing the deal.
An All-Cash Acquisition
The funds affiliated with the private equity company completed the all-cash acquisition for $11 per share in a deal that turned MoneyGram private, pending its delisting from Nasdaq.
"Completing the transaction with MDP marks the beginning of a transformative new chapter for the organization," commented Alex Holmes, the Chairman and CEO of MoneyGram. "With MDP's support, MoneyGram is uniquely positioned to accelerate our growth strategy and expand our network to reach more consumers worldwide."
With more than 150 million customers globally in 135 countries, MoneyGram became a target of acquisition after suffering heavy debt and increasing competition from rivals like Western Union and Remitly Global.
Some of the potential buyers that expressed interest in taking over the remittance firm include China's Ant Financial, which had quoted $1.2 billion. However, the deal fell through reportedly due to national security concerns by the US government.
Approval by Global Regulators
Last December, in a press release, MoneyGram said that except for one, all the international money transmission regulators, including the Financial Conduct Authority (FCA) in the UK, and the National Bank of Belgium, where MoneyGram hold its European licenses, had approved the takeover.
Similarly, in the US, all the applicable US States and territories agreed to the deal, and the marketing period commenced before January 3, 2023, according to the merger terms.
BofA Securities and Vinson & Elkins LLP acted as the financial advisor and legal counsel for MoneyGram, respectively, while Goldman Sachs acted as the lead financial advisor to MDP. Furthermore, Latham & Watkins LLP, Kirkland & Ellis LLP and Covington & Burling LLP provided legal counsel for the deal.
In other news, Finance Magnates reported in February that the United States started to disburse $115 million in compensation to 38,889 victims of fraudulent schemes committed through MoneyGram. The distribution of the reparations occurred 12 years after MoneyGram entered into a deferred prosecution agreement with the US Department of Justice.
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