U.K.-based foreign exchange company Moneycorp is entering the U.S. market and targeting SME clients through its acquisition of Commonwealth FX.
Reports Wednesday (May 10) said Moneycorp has agreed to acquire Commonwealth FX, though the companies did not disclose the price tag of the deal, but did say that it would finance it by paying 20 percent using cash on hand. The remainder will be financed through external financing, according to Nick Haslehurst, chief financial and operations officer for Moneycorp.
Haslehurst told reporters at Reuters that the takeover would allow Moneycorp to deploy an FX platform designed for small- and medium-sized enterprises using Commonwealth technology.
“I think in the United States the provision of cross-border banking, payments and FX services by the big mainstream banks doesn’t service that SME and mid-cap market in the U.S. particularly well,” he told the publication. “Having acquired Commonwealth, the ability to leverage their licensing structure and sales team to roll out Moneycorp’s transparent, fast, efficient service provision we believe will give us a big advantage for customer acquisition.”
Moneycorp provides online and telephone payments and facilitated more than seven million transactions last year totaling $32.3 million in value, according to reports. This isn’t the first time Moneycorp has looked to expand its FX operations — last year the company introduced its B2B service in Spain and expanded into Romania.
Reports also said Moneycorp revenues hit $140 million last year, while Commonwealth revenue hit $20 million. Commonwealth currently has more than 4,000 customers on its books in the U.S. and facilitates more than $3 billion in cross-border payments.