MoneyGram Will Go Private in $1.8 Billion Deal With Private-Equity Player Madison Dearborn

Money-transfer powerhouse MoneyGram International Inc. will go private later this year in a deal announced Tuesday with private-equity firm Madison Dearborn Partners LLC. Valued at $11 per common-stock share, the deal also includes assumption of $799 million in debt. 

Expected to close in the fourth quarter, the deal will see MoneyGram continue under its own brand and leadership with its headquarters remaining in Dallas. MoneyGram’s stock was trading at $10.58 early this morning.

“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,” Alex Holmes, MoneyGram chairman and chief executive, said in a statement. 

MoneyGram’s digital overhaul, which accelerated in 2021, has been paying off. In its third-quarter report, MoneyGram said digital revenue, which includes MoneyGram Online, digital partners, direct transfers to banks, mobile wallets, and debit card products such as Visa Direct, totaled $69.5 million, up 27.5% from the 2021 third quarter total of $54.5 million. 

At least one analyst considers the move to go private to be a positive. “MoneyGram has a strong global brand, and we think the broad agent network is an asset. Business fundamentals over the past few years have been plagued by regulatory headwinds, tightening risk controls, competition, and a stretched balance sheet; however, several of these appear to be behind the company,” says William Blair & Co. LLC analyst Christopher Kennedy, in a research note released Tuesday.

MoneyGram has been the target of recent failed acquisitions, including proposals in 2017  from Ant Financial Services Group and Euronet Worldwide Inc.

Other details of the Madison Dearborn deal include a 30-day “go-shop” period that permits MoneyGram to consider other bids. Chicago-based Madison Dearborn has several investments in financial-services companies including a $150-million stake in EVO Payments Inc.