Establishes Direct Relationship With Over 10,000 Agent Locations
in Seven European Countries; Strategic Move to Grow Core Business,
Directly Manage Consumer Experience and Improve Cost Structure
The Western Union Company (NYSE:WU), a global leader in money transfer
services, signed an agreement today to acquire the money transfer
business of European-based FEXCO, one of the company’s largest Agents.
The transaction, expected to close the first half of 2009 and subject to
customary regulatory approvals and closing conditions, is part of
Western Union’s strategy to be closer to its consumer base and position
its brand for continued growth. FEXCO currently manages and provides all
services and support to more than 10,000 consumer-facing locations in
seven European countries: the United Kingdom, Spain, Ireland, Sweden,
Norway, Denmark and Finland. As a result of this transaction, Western
Union will now:
Directly manage more than 10,000 consumer-facing locations in seven
European countries and provide direct training, marketing and
operations support;
Have greater influence over the consumer brand experience;
Be better positioned in Europe following the implementation of the
Payment Services Directive (PSD), scheduled to take place in November
of 2009, to enter new markets, introduce new products and services,
and expand the type of agents to new classes of trade in certain
countries.
Western Union President and Chief Executive Officer Christina Gold said,
“FEXCO has been a valued partner of Western Union for nearly two decades
and has played an important role in the expansion of our business in
Europe. This transaction will give us greater management of our
distribution in these regions and create a more flexible and responsive
operational structure as we anticipate the coming regulatory changes to
the money transfer business in Europe. We believe the acquisition of
FEXCO is timely and strategic. It will position us for margin expansion
and growth over time.”
Brian McCarthy, FEXCO’s Founder and Executive Chairman, added, “A key to
FEXCO’s success has been its entrepreneurial spirit to build ahead of
market opportunities. We are proud of the trusted money transfer network
we have built across Europe and the customers we have served for almost
two decades. FEXCO is confident of Western Union’s ability to continue
growing the business while expanding on our established consumer
relationships and solid foundations.”
“We are pleased that the strong relationship forged between both
companies will sustain into the future as we continue to provide Western
Union with strategic support. We also believe that FEXCO can support
Western Union’s Global Money Transfer business through targeted
development of new and enhanced applications for their markets in the
future,” McCarthy concluded.
Following and subject to regulatory approvals and satisfaction of
closing conditions, Western Union will assume 100 percent ownership of
FEXCO’s money transfer business. Approximately 300 FEXCO employees will
join Western Union upon completion of the transaction. FEXCOwill
continue to support Western Union through the operation of FEXCO’s
European call centers located in Killorglin and Cahirciveen, Ireland,
and be responsible for those employees.
FEXCO has been a Western Union Agent since 1990, and in 2001 Western
Union acquired a 25 percent stake in its overall business. As part of
the deal, Western Union will surrender its stake in the non-money
transfer business of FEXCO. The purchase of the FEXCO money transfer
business and the surrender of Western Union's stake in FEXCO's other
businesses will result in a net cash payment by Western Union to FEXCO
of ?123.1 million (US$159.5 million).
The transaction is expected to be $0.02 dilutive to Western Union’s
earnings per share in 2009. The dilutive impact was included in the
company’s 2009 earnings per share guidance of $1.18 to $1.28 provided on
February 5, 2009.
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 “will,” “should,”
“would” and “could” are intended to identify such forward-looking
statements. Readers of this press release by 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 under “Risk Factors” included within
the Annual Report on Form 10-K for the year ended December 31, 2007. 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: changes in general economic conditions and
economic conditions in the geographic regions and industries in which we
operate; adverse movements and volatility in capital markets and other
events which affect our liquidity, the liquidity of our agents, or the
value of, or our ability to recover our investments; changes in
immigration laws, patterns and other factors related to immigrants;
technological changes, particularly with respect to e-commerce; the
failure by us, our agents or subagents to comply with our business and
technology standards and contract requirements or applicable laws and
regulations, especially laws designed to prevent money laundering and
terrorist financing; our ability to attract and retain qualified key
employees and to manage our workforce successfully; changes in foreign
exchange rates, including the impact of the regulation of foreign
exchange spreads on money transfers; political conditions and related
actions in the United States and abroad which may adversely affect our
businesses and economic conditions as a whole; failure to maintain
sufficient amounts or types of regulatory capital to meet the changing
requirements of our various regulators worldwide; growth in the money
transfer market and other markets in which we operate at rates
significantly different than recent levels; failure to implement agent
contracts according to schedule; our ability to maintain our agent
network and biller relationships under terms consistent with or more
advantageous to us than those currently in place; interruptions of
United States government relations with countries in which we have or
are implementing material agent contracts; deterioration in consumers’
and clients’ confidence in our business, or in money transfer providers
generally; failure to manage credit and fraud risks presented by our
agents and consumers or non performance of our financial services
providers and insurance carriers; adverse rating actions by credit
rating agencies; liabilities and unanticipated developments resulting
from litigation and regulatory investigations and similar matters,
including costs, expenses, settlements and judgments; changes in United
States or foreign laws, rules and regulations including the Internal
Revenue Code, and governmental or judicial interpretations thereof; our
ability to favorably resolve tax matters with the Internal Revenue
Service and other tax jurisdictions; changes in industry standards
affecting our business; changes in accounting standards, rules and
interpretations; failure to compete effectively in the money transfer
industry with respect to global and niche or corridor money transfer
providers, banks and other nonbank money transfer services providers,
including telecommunications providers, card associations and card-based
payment providers; our ability to grow our core businesses; our ability
to develop and introduce new products, services and enhancements, and
gain market acceptance of such products; our ability to protect our
brands and our other intellectual property rights; our ability to manage
the potential both for patent protection and patent liability in the
context of a rapidly developing legal framework for intellectual
property protection; any material breach of security of or interruptions
in any of our systems; mergers, acquisitions and integration of acquired
businesses and technologies into our company and the realization of
anticipated synergies from these acquisitions; adverse consequences from
our spin-off from First Data Corporation, including resolution of
certain ongoing matters; decisions to downsize, sell or close units, or
to transition operating activities from one location to another or to
third parties, particularly transitions from the United States to other
countries; decisions to change our business mix; cessation of various
services provided to us by third-party vendors; 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 leader in global money transfer
services. Together with its affiliates, Orlandi Valuta and Vigo, Western
Union provides consumers with fast, reliable and convenient ways to send
and receive money around the world, as well as send payments and
purchase money orders. It operates through a network of more than
375,000 Agent locations in over 200 countries and territories. Famous
for its pioneering telegraph services, the original Western Union dates
back to 1851. For more information, visit www.westernunion.com.
About FEXCO
FEXCO is a global payments company headquartered in Killorglin, Kerry
County, Ireland with operations in Ireland, the UK, Spain, Scandinavia,
Malta, Dubai, Australia and USA. The company was established in 1981 by
its Executive Chairman, Brian McCarthy, and offers a range of Global
Consumer Payments, Global Corporate Payments and Business Services. The
company is privately owned, with Western Union currently holding a
minority share in the business.
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CONTACT: Western Union
Daniel Díaz, +1-720-332-5564 (Media)
daniel.diaz@WesternUnion.com
Gary Kohn, +1-720-332-8276 (Investors)
gary.kohn@WesternUnion.com