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Investing.com — MoneyGram Int (NASDAQ:MGI) surged 20% Tuesday on news it will be acquired by Madison Dearborn Partners, a private equity firm based in Chicago.
Madison Dearborn will acquire MoneyGram for $11 per share in an all-cash transaction valued at approximately $1.8 billion. The price represents a premium of roughly 50% to MoneyGram’s closing stock price on Monday, the last trading day before talk of a possible transaction.
In addition, once the transaction has been completed, Madison Dearborn will refinance the company’s outstanding debt, which stood at $799 million at the end of December.
The agreement includes a 30-day “go-shop” period, which means MoneyGram is permitted to initiate, solicit, encourage and evaluate other acquisition proposals. In addition, the company will have the right to terminate the Madison Dearborn agreement to enter into a superior proposal.
The transaction is expected to close in the fourth quarter.
“We are excited to enter into this transaction with MDP, which will deliver immediate and compelling value to shareholders and enable us to accelerate the advancement of our digital growth strategy,” said Alex Holmes, MoneyGram chairman, and CEO.
“This transaction is the culmination of a thorough process by the MoneyGram Board to enhance shareholder value while positioning our business for continued growth and expansion,” he added.
