Buyout firm Madison Dearborn approaches MoneyGram with acquisition bid-sources

Remitly Global

15/12/2021 22:30

(Adds share reaction)
    By Greg Roumeliotis
    Dec 15 (Reuters) - Private equity firm Madison Dearborn
Partners LLC has approached MoneyGram International Inc  MGI.O ,
one of the world's largest money transfer companies, with an
acquisition offer, two people familiar with the matter said on
Wednesday.
    The Dallas-based company has become an acquisition target as
intense competition in the sector from digital rivals such as
Remitly Global Inc  RELY.O  and Revolut has weighed on its
ability to capitalize on the growing market for payments and
remittances.
    There is no certainty that MoneyGram, which has a market
value of about $700 million and carries $800 million in debt net
of cash, will agree to any deal, the sources said. The company
has engaged with potential buyers several times in the last few
years, including in 2019, Reuters has reported https://www.reuters.com/article/us-moneygram-intl-m-a-exclusive-idINKCN1PJ2GV.
    Madison Dearborn and MoneyGram declined to comment.
MoneyGram shares ended trading on Wednesday up 8.2% at $7.94.
    MoneyGram, which according to its website has served 150
million people in the last five years, has been focusing on
digital payments as an area of growth. In October, it announced
a blockchain partnership that relies on financial technology
firm Circle's USD Coin, one of the world's fastest-growing
dollar digital currencies.  
    A $1.2 billion deal for China's Ant Financial to acquire
MoneyGram was blocked by the United States in January 2018 on
national security concerns. MoneyGram shares took a hit as a
result, but have since recovered. They are up 28% year-to-date
versus an 18% rise in the Nasdaq Composite index.
    The company reported third-quarter operating income of $26.8
million, down from $36.6 million a year ago, amid a rise in
transactional expenses. 
    

 (Reporting by Greg Roumeliotis in New York; Additional
reporting by Chibuike Oguh in New York; Editing by Nick
Zieminski and Cynthia Osterman)
 ((Greg.Roumeliotis@thomsonreuters.com; +1 646 223 6022; Reuters
Messaging: greg.roumeliotis.thomsonreuters.com@reuters.net))