The Western Union Co. said Tuesday it has agreed to acquire Travelex Global Business Payments for about $973.8 million in cash, in a deal that will allow it to expand rapidly in the business of international payment processing.
The Travelex division provides international payments services to business clients, mostly small and medium-sized companies and distribution partners.
Western Union is paying 606 million pounds for the Travelex business. It is expected to boost Western Union's earnings by 2 cents per share this year and 4 cents per share in 2012. The company expects acquisition related noncash amortization expenses of about $40 million per year beginning in 2012.
The acquisition is expected to close later this year.
Western Union plans to accelerate growth for the business by expanding in more regions, gaining access to new customers and segments and introducing some third party distribution capabilities to its current bank relationships.
Western Union first entered the business-to-business cross-border payments market two years ago with its acquisition of Custom House.
Western Union is based in Englewood, Colo. Travelex is based in London and is a unit of Travelex Holdings Ltd.
Western Union shares slipped 18 cents to $20.06 in morning trading.