The Company agrees to sell Speedpay for $750
million in cash
The Western Union Company (NYSE: WU), a global leader in
cross-border, cross-currency money movement, and ACI Worldwide
(NASDAQ: ACIW), a leading global provider of
real-time electronic payment and banking solutions,
today announced they have entered into a definitive agreement for
ACI to acquire Speedpay, Western Union’s United States bill pay
business, for $750 million in an all-cash transaction. The
transaction is expected to close by the end of the second quarter
of 2019, subject to customary closing conditions and regulatory
approvals.
The Company also announced that its Board of Directors approved
a new three-year share repurchase authorization. The new $1.0
billion share repurchase authorization will expire December 31,
2021 and is in addition to the $544 million remaining under the
previous authorization as of December 31, 2018.
Hikmet Ersek, president and CEO of Western Union, stated,
“Divesting the Speedpay business allows us to concentrate our
resources on our cross-border money movement strategies and
monetize a non-core asset for our shareholders. Our strategy
remains focused on expanding our digital services, leveraging our
platform to unlock new cross-border, cross-currency payments
opportunities, and generating additional operating
efficiencies.”
Ersek added, “We are also pleased to announce a new share
repurchase authorization, which signifies our continued commitment
to shareholder-focused capital allocation.”
Speedpay provides electronic bill presentment and payment
solutions to a variety of business sectors in the U.S., including
utilities, auto finance, mortgage, consumer finance, insurance,
telecommunications, and government finance. The Speedpay business
generated approximately $350 million of revenue in 2018,
representing 6% of total Western Union revenue, and approximately
$90 million of operating income, which includes approximately $10
million of corporate expenses allocated to the business.
The Company expects to record a pre-tax gain on the sale of
approximately $500 million when the transaction closes. Net
proceeds of the transaction, after taxes on the gain, are projected
to be approximately $575 million and the Company intends to use the
proceeds to return capital to shareholders and manage its capital
structure.
The Company will update its 2019 outlook to reflect the
divestiture, including the gain on sale impact to GAAP EPS and the
effect from removal of a partial year of Speedpay earnings, as well
as any impact from use of proceeds in 2019, in its first quarter
earnings release. The Company does not expect the divestiture to
affect its 2019 operating margin outlook of approximately 20%.
Centerview Partners LLC is acting as financial advisor to
Western Union on the Speedpay transaction and Sidley Austin LLP is
acting as legal counsel.
Safe Harbor Compliance Statement for Forward-Looking
Statements
This press release contains certain statements that are
forward-looking within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are not guarantees
of future performance and involve certain risks, uncertainties and
assumptions that are difficult to predict. Actual outcomes and
results may differ materially from those expressed in, or implied
by, our forward-looking statements. Words such as "expects,"
"intends," "anticipates," "believes," "estimates," "guides,"
"provides guidance," "provides outlook" and other similar
expressions or future or conditional verbs such as "may," "will,"
"should," "would," "could," and "might" are intended to identify
such forward-looking statements. Readers of this press release of
The Western Union Company (the "Company," "Western Union," "we,"
"our" or "us") should not rely solely on the forward-looking
statements and should consider all uncertainties and risks
discussed in the "Risk Factors" section and throughout the Annual
Report on Form 10-K for the year ended December 31, 2018.
The statements are only as of the date they are made, and the
Company undertakes no obligation to update any forward-looking
statement.
Possible events or factors that could cause results or
performance to differ materially from those expressed in our
forward-looking statements include the following: (i) events
related to our business and industry, such as: changes in general
economic conditions and economic conditions in the regions and
industries in which we operate, including global economic downturns
and trade disruptions, or significantly slower growth or declines
in the money transfer, payment service, and other markets in which
we operate, including downturns or declines related to
interruptions in migration patterns, or non-performance by our
banks, lenders, insurers, or other financial services providers;
failure to compete effectively in the money transfer and payment
service industry, including among other things, with respect to
price, with global and niche or corridor money transfer providers,
banks and other money transfer and payment service providers,
including electronic, mobile and Internet-based services, card
associations, and card-based payment providers, and with digital
currencies and related protocols, and other innovations in
technology and business models; political conditions and related
actions, including trade restrictions and government sanctions, in
the United States and abroad which may adversely affect our
business and economic conditions as a whole, including
interruptions of United States or other government relations with
countries in which we have or are implementing significant business
relationships with agents or clients; deterioration in customer
confidence in our business, or in money transfer and payment
service providers generally; our ability to adopt new technology
and develop and gain market acceptance of new and enhanced services
in response to changing industry and consumer needs or trends;
changes in, and failure to manage effectively, exposure to foreign
exchange rates, including the impact of the regulation of foreign
exchange spreads on money transfers and payment transactions; any
material breach of security, including cybersecurity, or safeguards
of or interruptions in any of our systems or those of our vendors
or other third parties; cessation of or defects in various services
provided to us by third-party vendors; mergers, acquisitions, and
the integration of acquired businesses and technologies into our
Company, divestitures, and the failure to realize anticipated
financial benefits from these transactions, and events requiring us
to write down our goodwill; decisions to change our business mix;
failure to manage credit and fraud risks presented by our agents,
clients and consumers; failure to maintain our agent network and
business relationships under terms consistent with or more
advantageous to us than those currently in place, including due to
increased costs or loss of business as a result of increased
compliance requirements or difficulty for us, our agents or their
subagents in establishing or maintaining relationships with banks
needed to conduct our services; changes in tax laws, or their
interpretation, including with respect to United States tax reform
legislation enacted in December 2017 (the “Tax Act”), any
subsequent regulation, and potential related state income tax
impacts, and unfavorable resolution of tax contingencies; adverse
rating actions by credit rating agencies; our ability to realize
the anticipated benefits from business transformation, productivity
and cost-savings, and other related initiatives, which may include
decisions to downsize or to transition operating activities from
one location to another, and to minimize any disruptions in our
workforce that may result from those initiatives; our ability to
protect our brands and our other intellectual property rights and
to defend ourselves against potential intellectual property
infringement claims; our ability to attract and retain qualified
key employees and to manage our workforce successfully; material
changes in the market value or liquidity of securities that we
hold; restrictions imposed by our debt obligations; (ii) events
related to our regulatory and litigation environment, such as:
liabilities or loss of business resulting from a failure by us, our
agents or their subagents to comply with laws and regulations and
regulatory or judicial interpretations thereof, including laws and
regulations designed to protect consumers, or detect and prevent
money laundering, terrorist financing, fraud and other illicit
activity; increased costs or loss of business due to regulatory
initiatives and changes in laws, regulations and industry practices
and standards, including changes in interpretations, in the United
States and abroad, affecting us, our agents or their subagents, or
the banks with which we or our agents maintain bank accounts needed
to provide our services, including related to anti-money laundering
regulations, anti-fraud measures, our licensing arrangements,
customer due diligence, agent and subagent due diligence,
registration and monitoring requirements, consumer protection
requirements, remittances, and immigration; liabilities, increased
costs or loss of business and unanticipated developments resulting
from governmental investigations and consent agreements with or
enforcement actions by regulators, including those associated with
the settlement agreements with the United States Department of
Justice, certain United States Attorney’s Offices, the United
States Federal Trade Commission, the Financial Crimes Enforcement
Network of the United States Department of Treasury, and various
state attorneys general (the “Joint Settlement Agreements”), and
those associated with the January 4, 2018 consent order which
resolved a matter with the New York State Department of Financial
Services (the “NYDFS Consent Order”); liabilities resulting from
litigation, including class-action lawsuits and similar matters,
and regulatory enforcement actions, including costs, expenses,
settlements and judgments; failure to comply with regulations and
evolving industry standards regarding consumer privacy and data use
and security, including with respect to the General Data Protection
Regulation (“GDPR”) approved by the European Union (“EU”); failure
to comply with the Dodd-Frank Wall Street Reform and Consumer
Protection Act (the “Dodd-Frank Act”), as well as regulations
issued pursuant to it and the actions of the Consumer Financial
Protection Bureau (“CFPB”) and similar legislation and regulations
enacted by other governmental authorities in the United States and
abroad related to consumer protection and derivative transactions;
effects of unclaimed property laws or their interpretation or the
enforcement thereof; failure to maintain sufficient amounts or
types of regulatory capital or other restrictions on the use of our
working capital to meet the changing requirements of our regulators
worldwide; changes in accounting standards, rules and
interpretations or industry standards affecting our business; (iii)
events related to the Speedpay transaction, such as: the impact on
the Company of the consummation of the sale of Speedpay; the timely
receipt of regulatory approvals necessary to consummate the sale of
Speedpay within the timeframe contemplated by the parties; the
ability of the Company and ACI to consummate the sale of Speedpay
on a timely and effective basis, including the ability to timely
separate the Speedpay business from the Company and the ability to
timely perform post-divestiture transition services and support
(including the ability to timely receive third-party consents
necessary in connection therewith); distraction of management in
connection with efforts to consummate the sale of Speedpay and to
implement post-divestiture transition services and support; and
risk of unanticipated costs, liabilities and adverse impact on
business operations arising from the Company’s provision of
post-divestiture transition services and support in connection with
the sale of Speedpay; and (iv) other events, such as: catastrophic
events; and management's ability to identify and manage these
and other risks.
About Western Union
The Western Union Company (NYSE: WU) is a global leader in
cross-border, cross-currency money movement. Our omnichannel
platform connects the digital and physical worlds and makes it
possible for consumers and businesses to send and receive money and
make payments with speed, ease, and reliability. As of December 31,
2018, our network included over 550,000 retail agent locations
offering Western Union, Vigo or Orlandi Valuta branded services in
more than 200 countries and territories, with the capability to
send money to billions of accounts. Additionally, westernunion.com,
our fastest growing channel in 2018, is available in more than
60 countries, plus additional territories, to move money around the
world. In 2018, we moved over $300 billion in principal in nearly
130 currencies and processed 34 transactions every second across
all our services. With our global reach, Western Union moves money
for better, connecting family, friends and businesses to enable
financial inclusion and support economic growth. For more
information, visit www.westernunion.com.
WU-G
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Media Relations:Claire Treacy+1 (720)
332-0652claire.treacy@westernunion.com
Investor Relations:Mike Salop+1(720)
332-8276mike.salop@westernunion.com
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