In Thursday’s premarket session, Western Union Company (WU) shares gained 2.58% to $22.70 at last check. WU stock ended last trading session down -2.68% at $22.13. WU stock recorded a trading volume of 6.36 million shares, which exceeded the average daily trading volume of 3.63 million shares for the last 50 days. In addition, the WU stock is being traded at a price-to-earnings ratio of 12.23. Furthermore, WU stock has a price to cash flow ratio of 17.21 and a price to sales ratio of 1.87. WU stock surged following the news that one of its business segments will be sold.
What is WU selling?
Western Union is a leading global player in cross-border, cross-currency payments and money transfers. In addition to its leading global financial network, WU’s platform enables seamless cross-border transactions across more than 200 countries and 130 currencies. WU connects businesses, financial institutions, government agencies, and consumers on the largest network available anywhere in the world, with access to over 550,000 retail locations, millions of digital wallets and e-wallets, and billions of bank accounts. With a connection to the world, WU makes boundless possibilities accessible.
Western Union announced that it has reached a definitive agreement with Goldfinch Partners and The Baupost Group. Goldfinch is a private equity firm that invests in businesses that are at the forefront of technology, while Baupost is an investment company with a $31 billion market value.
- The terms of the agreement call for a consortium led by Goldfinch and Baupost to acquire Western Union Business Solutions for about $910 million in cash.
- After acquiring Custom House in 2009 and Travelex Global Business Payments in 2011, Western Union established Western Union Business Solutions.
- During the last 12 months ended June 30, 2021, Western Union Business Solutions, which offers foreign exchange and cross-border payments to small and medium-sized businesses, represented approximately 7% of total revenue.
- By selling its business solutions to KPMG, Western Union plans to increase the extent to which it penetrates the global cross-border consumer payments market.
- Additionally, Western Union plans to expand its open platform strategy to serve multiple customer segments and use cases, including through partnerships with digital banks.
- Furthermore, WU plans to extend its global addressable market by offering a WU-branded consumer ecosystem strategy to its unique global consumer base.
How will WU Stock complete the transaction?
Western Union (WU) expects the transaction to close in two phases. WU expects the first closing to be completed in early 2022; Western Union Business Solutions will be transferred to an entity controlled by Goldfinch and Baupost, with the exception of the operations conducted through Western Union International Bank in the European Union and the United Kingdom. By late 2022, the remaining Western Union Business Solutions businesses controlled by Western Union International Bank will be transferred to the new entity.
