Western Union to Own International Money Express, Inc., Following Acquisition Agreement
In a strategic move to strengthen its retail presence in the U.S. and expand market coverage in key high-growth Latin American corridors, Western Union has announced the acquisition of Intermex Inc. for approximately $500 million. The transaction, which represents approximately $500 million in equity and enterprise value, has been unanimously approved by Western Union's Board of Directors and Intermex's Board of Directors, who also recommend that Intermex stockholders vote in favor of the merger.
The acquisition is subject to customary closing conditions, regulatory approvals, and approval by Intermex's stockholders. The deal is expected to close in the second half of 2023, subject to the satisfaction of these conditions.
Key Benefits of the Acquisition
The acquisition is expected to bring several benefits to Western Union, including:
- Expanded Retail Footprint: Combining Intermex’s 12,000-agent network and 6 million customers with Western Union’s extensive global network extends retail reach and presence in underserved and high-potential geographies.
- Digital Transformation Acceleration: Integration allows greater access for Intermex’s underbanked or first-time digital users to Western Union’s digital platforms, reducing transaction costs and driving cross-selling and customer retention.
- Financial Synergies: The deal is expected to deliver approximately $30 million in annual cost synergies within two years, primarily by streamlining operations and agent networks. It is also projected to increase adjusted earnings per share (EPS) by over $0.10 in the first full year post-acquisition, signalling immediate shareholder value.
- Market Share Growth in Key Corridors: Intermex’s expertise in U.S.-Latin America remittance corridors, including Mexico, Guatemala, El Salvador, Honduras, and the Dominican Republic, strengthens Western Union’s position in a $1.2 trillion global remittance market.
- Complementary Capabilities: The acquisition merges Intermex’s deep market knowledge and agent relationships with Western Union’s technological infrastructure and global reach, positioning the combined entity to compete effectively amid digital disruption and fintech competition in cross-border payments.
The acquisition is expected to be immediately accretive to Western Union's adjusted EPS by more than $0.10 in the first full year post close. It is also anticipated to drive growth across North America and accelerate digital new customer acquisition.
A Smooth Transition
Following completion, the companies expect to implement a coordinated integration plan designed to provide a smooth transition for all customers, agents, and partners. There is potential for additional revenue synergies through broader distribution and product offerings.
The acquisition values Intermex at $16.00 per share in cash, representing a roughly 50% premium to Intermex's 90-day volume-weighted average price. Western Union and International Money Express, Inc. (Intermex) have agreed to a definitive acquisition deal.
The acquisition is a disciplined, strategic move to consolidate market share, enhance operational efficiencies, and drive both physical and digital growth in a transforming payments industry. It expands market coverage in high potential geographies and strengthens Western Union's retail offering in the U.S. The transaction is expected to generate approximately $30 million in annual run-rate cost synergies within the first 24 months.
- This strategic acquisition by Western Union is anticipated to boost its finance sector, as it aims to drive growth across North America and accelerate digital new customer acquisition by integrating Intermex's capabilities, which includes its expertise in US-Latin America remittance corridors.
- In the realm of business, Western Union's investment in Intermex is expected to yield significant benefits, such as financial synergies, expanded retail footprint, and digital transformation acceleration, ultimately positioning the combined entity to compete effectively amid digital disruption and fintech competition in cross-border payments.
