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Madison Dearborn Partners Acquires MoneyGram For $1.8 Billion In Cash

MoneyGram will no longer continue as a separate entity in a surprising turn of events. The firm has agreed to an all-cash deal of $1.8 billion. Following the acquisition, MoneyGram will operate under the Madison Dearborn Partners banner.

MoneyGram Agrees To Be Acquired

The financial world will see many more mergers and acquisitions over the coming years. Various institutions and service providers will find it hard to stay afloat in the current landscape. Some may try to pivot their business model, but others will not be so lucky. For MoneyGram, the decision to be acquired by a private equity firm makes much sense today, even if the acquirer paid a steep premium.

The private equity firm Madison Dearborn Partners, or MDP, will acquire the money transfer service. Interestingly, the $1.8 billion deal is an all-cash agreement, indicating some liquidity was necessary. Moreover, MDP’s funds will acquire outstanding MoneyGram shares for $11 per share. That is roughly 50% above the closing stock price on December 14 when talks about a possible sale erupted.

MoneyGram CEO Alex Holmes adds:

“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.”

Ant Financial almost acquired MoneyGram in 2017 under a $1.2 billion agreement. However, the deal was nixed by the Committee on Foreign Investment in the US. A 2020 deal with Western Union also fell through. Additionally, MoneyGram’s partnership with Ripple – for cheaper and faster money transfers – came to an abrupt end in 2020. It will be intriguing to see how this acquisition affects its future prospects.