MoneyGram Finds $1.8B Suitor in Madison Dearborn

MoneyGram is set to be acquired by Chicago-based private equity firm Madison Dearborn Partners for $1.8 billion, the money transfer service announced Tuesday (Feb. 15).

News of the all-cash transaction comes just three weeks after reports that a trio of private equity outfits — Madison Dearborn among them — had lined up to purchase MoneyGram.

“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,” Alex Holmes, MoneyGram’s CEO and chairman, said in the news release.

Read more: Equity Firms Line Up to Buy Moneygram

“MoneyGram has undergone a rapid transformation over the last several years to expand our digital capabilities and adapt to the evolving needs of our customers,” Holmes said. “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.”

The agreement will see MoneyGram shareholders receive $11 in cash for each share of MoneyGram common stock they own. When the transaction closes, Madison Dearborn will be refinancing Moneygram’s outstanding debt, which was $799 million at the end of 2021.

“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,” said Vahe Dombalagian, a managing director on MDP’s financial and transaction services team. “Alex and his team have transformed MoneyGram over the past few years, and we are excited to help them execute the important work ahead to continue evolving and growing MoneyGram’s business.”

The $11-per-share deal was slightly higher than the $10.50/share offering Madison Dearborn had initially offered last month. Other potential buyers included Siris Capital Group LLC and Advent International Corp.

Debt financing for the transaction has been provided by Goldman Sachs, Deutsche Bank Securities Inc. and Barclays. The deal is expected to close by the fourth quarter of this year, after which MoneyGram will become a private company.

Based in Dallas, MoneyGram had become an acquisition target amid competition from firms such as Remitly and Revolut, which has hindered the company’s ability to capitalize on the payments and remittances space.