Private equity firm Madison Dearborn Partners (MDP) has signed an agreement to acquire cross-border money transfer company MoneyGram International in a $1.8bn deal.
The all-cash transaction will see funds affiliated with MDP purchase all outstanding shares of MoneyGram for $11.00 per share.
The deal comes at a time when debt-burdened MoneyGram is struggling to compete with rivals such as Remitly Global and Western Union.
The firm, which serves over 150 million customers globally, has approximately $799m in debt as of 31 December 2021.
Under the agreement, MDP will refinance the company’s outstanding debt when the transaction completes in the fourth quarter of the year.
MoneyGram Chairman and CEO Alex Holmes said that the deal will ‘deliver immediate and compelling value to shareholders’ and allow the firm to scale up its digital growth strategy.
Holmes said: “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.
“By partnering with MDP and becoming a private company, we will have greater opportunities to innovate and transform MoneyGram to lead the industry in cross-border payment technology and deliver a more expansive set of digital offerings, while leveraging our global platform for new customers and use cases.”
According to a Reuters reports, MoneyGram, which also received bids from Siris Capital Group and Advent International Corp, was initially offered $10.50 per share by MDP.
In the past few years, the Dallas-based money transfer firm was engaged with a number of potential buyers.
In 2018, the US regulators blocked the $1.2bn acquisition of the firm by China-based Ant Financial.
The deal with MDP is expected to have no effect on MoneyGram brand, which will continue to be led by Alex Holmes and its existing leadership team.
The firm will also continue to operate from its Dallas headquarters.
MDP Financial and Transaction Services team managing director Vahe Dombalagian said: “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.”