In a strategic move to expand its presence in Latin America, Western Union Co. WU has announced the acquisition of Intermex IMXI for approximately $500 million.
Western Union To Acquire Intermex in $16-Per-Share Deal
Western Union revealed its plans to acquire Intermex, a U.S.-based company specializing in payment transfers to Latin America and the Caribbean, on Sunday. The acquisition is set to bolster Western Union’s position in the high-growth Latin American markets.
Check out the current price of WU stock here.
Under the deal, Western Union will pay $16 per Intermex share, a premium of more than 70% over Friday's closing price of $9.28. The transaction is expected to boost Western Union's adjusted earnings per share by over $0.10 in its first full year post-closing.
Intermex, serving around 6 million customers, will give Western Union access to its strong digital platforms and capabilities. The deal is expected to deliver $30 million in annual run-rate cost savings within two years.
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Western Union Eyes Growth Despite Earnings Miss
Western Union’s decision to acquire Intermex comes at a time when the company has been exploring new avenues for growth. Earlier in July, Western Union CEO Devin McGranahan said that the company was considering enabling customers to buy, sell, and store stablecoins, marking a significant step towards the convergence of traditional money transfer firms and blockchain-based digital assets.
However, Western Union’s second-quarter earnings, reported later that month, fell short of analyst expectations. The company posted quarterly earnings of 42 cents per share, missing the analyst consensus estimate of 44 cents per share.
Western Union's P/E ratio is below the Financial Services industry average of 47.12. While this could suggest the stock may underperform its peers, it might also indicate that the stock is undervalued.
According to Benzinga Edge Stock Rankings, Western Union has a growth score of 60.08% and a value rating of 46.85%. Click here to see how it compares to other leading financial services companies.
IMXI stock jumped 54% in Monday's premarket trading. Western Union shares also rose, gaining more than 1%, according to data from Benzinga Pro.
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