Chicago-based private equity firm, Madison Dearborn Partners (MDP), completes the acquisition of MoneyGram, a leading American cross-border peer-to-peer payments company.
A little more than a year after the deal was first announced, Chicago-based private equity firm Madison Dearborn Partners (MDP) has successfully acquired MoneyGram, an American cross-border peer-to-peer payments company.
An All-Cash Purchase
MoneyGram became private as a result of the all-cash purchase made by the funds connected to the private equity firm for $11 per share, pending its delisting from Nasdaq.
“Completing the transaction with MDP marks the beginning of a transformative new chapter for the organization,” said Alex Holmes, chairman and CEO of MoneyGram. MoneyGram is in a unique position to accelerate its expansion strategy and broaden its network in order to serve more customers worldwide thanks to MDP’s support.
MoneyGram, which has users in more than 150 million locations across 135 countries, became a candidate for takeover after accruing significant debt and facing increased competition from rivals like Western Union and Remitly Global.
One of the interested parties in purchasing the remittance company is China’s Ant Financial, which had set a $1.2 billion price. The US government’s concerns over national security, however, are said to be the reason the deal failed.
Aval from International Regulators
MoneyGram stated in a press release in December of last year that all international money transmission regulators, with the exception of one, had authorized the transaction. These regulators included the Financial Conduct Authority (FCA) in the UK and the National Bank of Belgium, where MoneyGram holds its European licenses.
Similar to this, the deal was approved by all eligible US States and Territories, and the marketing time started before January 3, 2023, as stipulated in the merger agreement.
MoneyGram was advised financially and legally by BofA Securities and Vinson & Elkins LLP, respectively, and MDP was advised financially and legally by Goldman Sachs. In addition, the deal’s legal guidance was supplied by Latham & Watkins LLP, Kirkland & Ellis LLP, and Covington & Burling LLP.
In related news, Finance Magnates reported in February that the United States had begun paying $115 million in compensation to 38,889 people who had fallen victim to scams carried out using MoneyGram. Twelve years after MoneyGram and the US Department of Justice signed a deferred prosecution deal, the restitution were distributed.