Travelex, one of the world’s leading foreign exchange specialists, today announces the sale of its business payments operations, Travelex Global Business Payments (“TGBP”), to The Western Union Company (“Western Union”) for a total cash consideration of £606 million.
The transaction allows Travelex to focus on its 30 million retail customers, with the provision of cash and pre-paid cards, as well its fast-growing international consumer payments and wholesale banknote operations. These businesses have been experiencing exceptional growth, with revenues last year up 17% driven by continuing expansion and contract wins. Travelex now has a network of close to 1,000 stores and more than 500 ATMs across 24 countries, as well as a growing online platform.
This deal marks the latest stage in the transformation of Travelex under the leadership of Peter Jackson. Proceeds from the sale will provide significant capital for further investment as the group looks to accelerate its growth in existing and new markets. Central to this strategy is an expansion into the fastest growing markets, as evidenced by the recent acquisition of Grupo Confidence, Brazil’s largest foreign exchange business. This is in addition to a continued push to provide customers with access to innovative foreign exchange products and services across the globe.
Following completion, Travelex will also use the proceeds to pay down debt, strengthening the balance sheet and providing a strong platform to support the continuing growth of the business.
The transaction also represents an attractive opportunity for Western Union, which will benefit from TGBP’s expertise as a leading provider of international business payments. TGBP currently provides international business payments to more than 35,000 businesses large and small across 14 countries, including the UK, US and Australia. For the year ended 31 December 2010, TGBP reported revenues of £141.5m and EBITDA of £44.6m.
The transaction is expected to complete by the end of 2011 following satisfaction of customary closing conditions.
Lloyd Dorfman, Chairman and Founder of Travelex, said: “This is a transformational deal for Travelex, marking a new chapter in our development. Travelex is already the world’s leading foreign exchange specialist and we are excited about the opportunities we have for continued growth. Following this deal, our strengthened balance sheet and significant resources will enable us to make even more of our unique brand and market-leading position.
“Western Union is the natural home for TGBP and we are confident that this great business will continue to thrive in the future.”
Peter Jackson, Chief Executive of Travelex, said: “This deal marks the latest step in our exciting growth strategy. Looking forward, we have three key areas of focus as we work to meet the needs of our customers and grow our business. We will continue to expand our global footprint; we will continue to invest in innovative products and services; and we will further extend the availability of our offering to customers across the globe.
“The global consumer foreign exchange market presents significant growth opportunities. Developing countries will play a key role, with many expected to overtake their European and North American counterparts in the next few years. “I am delighted that we have reached agreement with Western Union, who will benefit from TGBP’s expertise and customer franchise while providing TGBP with significant opportunities for continued growth.”
Hikmet Ersek, President and CEO of Western Union, said:
“The acquisition of Custom House in 2009 gave us an entry into the business-to-business cross-border payments market, and Travelex Global Business Payments gives us immediate scale, further reach, and added capabilities. We are excited to welcome Travelex Global Business Payments customers and employees to the Western Union family.”
Travelex +44 20 7400 4000
Dani Filer, Head of Communications
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Peter Hewer / Susanna Voyle / Tom Murray