The division provides international payments services to business clients, namely small and medium-sized enterprises (SME’s), corporations, and third party distribution partners including over 500 financial institutions. Projected 2011 revenues for TGBP are approximately £150 million, with a normalized EBITDA margin of approximately 30 percent.
In combination with Western Union’s existing Business Solutions business, the acquisition will give Western Union a leading position in the large and growing international business payments market, which has been driven by rapid growth in cross-border trade. Global SME cross-border payments revenues alone are estimated at $24 billion (based on McKinsey and Company estimates), which Western Union believes is similar in size to the consumer cross-border remittance market.
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 provides 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.”
Peter Jackson, Chief Executive of Travelex, said, “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.”
Western Union plans to accelerate growth for the combined business by utilizing the enhanced capabilities and resources to drive further geographic expansion, gain access to new customers and segments, introduce the TGBP third party distribution capabilities to Western Union’s financial institution relationships, and leverage the Western Union agent network for distribution in certain markets.