Alibaba Group Holding (NYSE: BABA) affiliate Ant Financial Services Group, a leading Chinese digital financial services provider and parent of global mobile payment platform Alipay, agreed to acquire Dallas-based MoneyGram (NASDAQ: MGI), a global money transfer service provider, for $13.25 per share in cash, representing an enterprise value of $880 million, including MoneyGram’s common and preferred shares, as well as the refinancing of its debt.
The purchase price represents a premium of 20 percent to MoneyGram’s volume weighted average share price over the prior three month period.
The deal will connect MoneyGram’s money transfer network of 2.4 billion bank and mobile accounts and 350,000 physical locations with Ant Financial’s users, who enjoy a broad suite of technology-based financial services, including payments, credit and insurance products. The combination will provide consumers in over 200 countries and territories with convenient and accessible financial services, which furthers Ant Financial’s mission to promote equal access to financial services globally.
The services of MoneyGram and Ant Financial are highly complementary. MoneyGram, which will remain headquartered in Dallas and continue to operate under its existing brand, will be able to leverage Ant Financial’s global presence and existing network to serve more than 630 million users — including 450 million with Alipay and 180 million with India’s leading mobile payment provider Paytm — to increase MoneyGram’s transaction volume across the broad Asia-Pacific region. The transaction will also help expand Ant Financial’s business in new global markets following its recent partnerships with Paytm in India and Ascend Money in Thailand.
“The acquisition of MoneyGram is a significant milestone in our mission to bring inclusive financial services to users around the world,” said Eric Jing, Chief Executive Officer of Ant Financial. “We believe financial services should be simple, low-cost and accessible to the many, not the few. The combination of Ant Financial and MoneyGram will provide greater access, security and simplicity for people around the world to remit funds, especially in major economies such as the United States, China, India, Mexico and the Philippines.”
“This transaction will significantly benefit consumers throughout the world who depend on innovative and reliable financial connections to friends and family,” said Alex Holmes, Chief Executive Officer of MoneyGram. “MoneyGram can now accelerate and expand our suite of global hybrid solutions and integrate an even larger digital and physical network, making money transfers easier for customers and providing a wider selection of services for the agents who serve them around the world. Ant Financial is an ideal partner for MoneyGram; together, we will be able to expand our business and, in doing so, offer more people around the world access to a reliable financial connection to loved ones.”
The deal has been approved by the MoneyGram Board of Directors. In addition, Thomas H. Lee Partners and certain MoneyGram executives who collectively own approximately 46 percent of the outstanding voting shares of MoneyGram have entered into agreements with MoneyGram to vote in favor of the transaction. The transaction is subject to the approval of MoneyGram stockholders, regulatory approvals and other customary closing conditions. The acquisition is expected to close in the second half of 2017.
MoneyGram will retain its brand name and management team after the closing. Alex Holmes will continue to serve as Chief Executive Officer of MoneyGram and work with Douglas Feagin, Senior Vice President of Ant Financial, and Souheil Badran, General Manager for North America, from Ant Financial to drive the integration between the two organizations. MoneyGram will remain headquartered in Dallas and is expected to maintain and grow its U.S.-based workforce.
Citi is serving as financial advisor to Ant Financial and Simpson Thacher & Bartlett LLP is serving as its legal advisor. BofA Merrill Lynch is serving as financial advisor to MoneyGram and Vinson & Elkins LLP is serving as its legal advisor.