Dallas-based MoneyGram International Inc. agreed Feb. 15 to be sold to Madison Dearborn Partners for $1.8 billion in cash, taking the company private.
Funds affiliated with the Chicago private equity firm will acquire all outstanding shares of MoneyGram for $11 per share, a 50% premium to MoneyGram’s closing stock price on Dec. 14 — the last trading day before media reports regarding a possible transaction.
MDP also will be refinancing the company’s outstanding debt, which was $799 million as of Dec. 31.
Goldman Sachs & Co., Deutsche Bank Securities Inc. and Barclays provided committed debt financing for the transaction, which is expected to close in the fourth quarter if it clears MoneyGram shareholders and regulators. The deal requires approvals in various jurisdictions related to money transmitter licenses.
The deal includes a 30-day “go-shop” period expiring on March 16. The MoneyGram board and its advisors are permitted to actively initiate, solicit, encourage and evaluate alternative acquisition proposals and potentially enter into negotiations with parties that may offer such proposals.
After the close of the transaction, it is expected that the company will continue to operate under the MoneyGram brand and be led by MoneyGram chairman and CEO Alex Holmes and the company’s existing leadership team. MoneyGram will keep its headquarters in Dallas.
Vinson & Elkins counseled MoneyGram led by partners Alan Bogdanow in Dallas and Lande Spottswood in Houston and senior associate Alex Robertson. They had assistance from associate John Sager, senior associate Sang Lee and associates Madison Bertrand and Emiliano Aguirre.
Also advising were partner David D’Alessandro, counsel Dario Mendoza and associates Mary Daniel Morgan and Hayden Rutledge (executive compensation/benefits); partner Cris Dewar, senior associate Randy Aman and associate Arthur Munoz (finance); and partner Ephraim (“Fry”) Wernick (government investigations) and senior associate Brian Howard (FCPA).
The team also included partner Hill Wellford, counsel David Smith and senior associate Ryan Will (antitrust); partner Rick Sofield (CFIUS); counsel Elizabeth McIntyre (sanctions); partner Craig Zieminski (litigation); counsel Rajesh Patel (technology transactions/IP); partner James Meyer and associate Tyler Underwood (tax); partner Sean Becker and associate Andrew Cox (labor/employment); and senior associates Lucy Liu and Joanna Enns and associates Jack Peterson and Nathan Kemp (corporate).
Paul Hastings is MoneyGram’s financial services regulatory counsel.
V&E’s Bogdanow advised MoneyGram on its $2 billion leveraged recapitalization; its $152 million secondary offering of common stock and simultaneous repurchase of $133 million of common stock; and its closing of a $415 million private offering of 5.375% senior secured notes due 2026 and a $400 million senior secured term loan just last year.
Spottswood counseled the company on its proposed $1.2 billion sale to Hong Kong-based Ant Financial, which was ultimately blocked by U.S. regulators over national security concerns in 2018.
Robert Villaseñor is general counsel for MoneyGram, where he has worked for more than four years. He previously was corporate counsel for Starbucks in Seattle for six years, securities and corporate finance counsel for Lennox International in Richardson, Texas, for two years and associate general counsel for Celanese in Dallas for four years.
Villaseñor began his career at Gibson, Dunn & Crutcher working in mergers and acquisitions and capital markets. He has his law degree from the University of Michigan.
BofA Securities Inc is the exclusive financial advisor to MoneyGram. Goldman Sachs is acting as lead financial advisor to MDP with Deutsche Bank Securities Inc., Barclays and J.P. Morgan Securities assisting.
Latham & Watkins, Kirkland & Ellis and Covington & Burling are providing legal counsel to MDP.
Holmes, the Moneygram CEO, said in a statement the transaction is the culmination of a process by the MoneyGram board to enhance shareholder value while positioning the business for continued growth and expansion.
“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. 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,” he said.
Vahe Dombalagian, a managing director on MDP’s financial and transaction services team, said he aims to apply the firm’s experience growing digital businesses and payments knowledge to help MoneyGram further strengthen its market-leading cross-border capabilities and enhance its digital platform.