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Western Union to Acquire the Money Transfer Business of One of Its Largest Agents, European-Based FEXCO

^{Published on 2009-02-09 23:06:35, Last Modified on 2009-02-09 23:09:04 - Market Wire}
 

ENGLEWOOD, Colo.--([ BUSINESS WIRE ])--The Western Union Company (NYSE:WU), a global leader in money transfer services, signed an agreement today to acquire the money transfer business of European-based FEXCO, one of the company's largest Agents.

The transaction, expected to close the first half of 2009 and subject to customary regulatory approvals and closing conditions, is part of Western Union's strategy to be closer to its consumer base and position its brand for continued growth. FEXCO currently manages and provides all services and support to more than 10,000 consumer-facing locations in seven European countries: the United Kingdom, Spain, Ireland, Sweden, Norway, Denmark and Finland. As a result of this transaction, Western Union will now:

• Directly manage more than 10,000 consumer-facing locations in seven European countries and provide direct training, marketing and operations support;
• Have greater influence over the consumer brand experience;
• Be better positioned in Europe following the implementation of the Payment Services Directive (PSD), scheduled to take place in November of 2009, to enter new markets, introduce new products and services, and expand the type of agents to new classes of trade in certain countries.

Western Union President and Chief Executive Officer Christina Gold said, "FEXCO has been a valued partner of Western Union for nearly two decades and has played an important role in the expansion of our business in Europe. This transaction will give us greater management of our distribution in these regions and create a more flexible and responsive operational structure as we anticipate the coming regulatory changes to the money transfer business in Europe. We believe the acquisition of FEXCO is timely and strategic. It will position us for margin expansion and growth over time."

Brian McCarthy, FEXCO's Founder and Executive Chairman, added, "A key to FEXCO's success has been its entrepreneurial spirit to build ahead of market opportunities. We are proud of the trusted money transfer network we have built across Europe and the customers we have served for almost two decades. FEXCO is confident of Western Union's ability to continue growing the business while expanding on our established consumer relationships and solid foundations."

"We are pleased that the strong relationship forged between both companies will sustain into the future as we continue to provide Western Union with strategic support. We also believe that FEXCO can support Western Union's Global Money Transfer business through targeted development of new and enhanced applications for their markets in the future," McCarthy concluded.

Following and subject to regulatory approvals and satisfaction of closing conditions, Western Union will assume 100 percent ownership of FEXCO's money transfer business. Approximately 300 FEXCO employees will join Western Union upon completion of the transaction. FEXCOwill continue to support Western Union through the operation of FEXCO's European call centers located in Killorglin and Cahirciveen, Ireland, and be responsible for those employees.

FEXCO has been a Western Union Agent since 1990, and in 2001 Western Union acquired a 25 percent stake in its overall business. As part of the deal, Western Union will surrender its stake in the non-money transfer business of FEXCO. The purchase of the FEXCO money transfer business and the surrender of Western Union's stake in FEXCO's other businesses will result in a net cash payment by Western Union to FEXCO of €123.1 million (US$159.5 million).

The transaction is expected to be $0.02 dilutive to Western Union's earnings per share in 2009. The dilutive impact was included in the company's 2009 earnings per share guidance of $1.18 to $1.28 provided on February 5, 2009.

Safe Harbor Compliance Statement for Forward-Looking Statements

This press release contains certain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Actual outcomes and results may differ materially from those expressed in, or implied by, our forward-looking statements. Words such as "expects," "intends," "anticipates," "believes," "estimates," "guides," "provides guidance", "provides outlook" and other similar expressions or future or conditional verbs such as "will," "should," "would" and "could" are intended to identify such forward-looking statements. Readers of this press release by The Western Union Company (the "Company," "Western Union," "we," "our" or "us") should not rely solely on the forward-looking statements and should consider all uncertainties and risks discussed under "Risk Factors" included within the Annual Report on Form 10-K for the year ended December 31, 2007. The statements are only as of the date they are made, and the Company undertakes no obligation to update any forward-looking statement.

Possible events or factors that could cause results or performance to differ materially from those expressed in our forward-looking statements include the following: changes in general economic conditions and economic conditions in the geographic regions and industries in which we operate; adverse movements and volatility in capital markets and other events which affect our liquidity, the liquidity of our agents, or the value of, or our ability to recover our investments; changes in immigration laws, patterns and other factors related to immigrants; technological changes, particularly with respect to e-commerce; the failure by us, our agents or subagents to comply with our business and technology standards and contract requirements or applicable laws and regulations, especially laws designed to prevent money laundering and terrorist financing; our ability to attract and retain qualified key employees and to manage our workforce successfully; changes in foreign exchange rates, including the impact of the regulation of foreign exchange spreads on money transfers; political conditions and related actions in the United States and abroad which may adversely affect our businesses and economic conditions as a whole; failure to maintain sufficient amounts or types of regulatory capital to meet the changing requirements of our various regulators worldwide; growth in the money transfer market and other markets in which we operate at rates significantly different than recent levels; failure to implement agent contracts according to schedule; our ability to maintain our agent network and biller relationships under terms consistent with or more advantageous to us than those currently in place; interruptions of United States government relations with countries in which we have or are implementing material agent contracts; deterioration in consumers' and clients' confidence in our business, or in money transfer providers generally; failure to manage credit and fraud risks presented by our agents and consumers or non performance of our financial services providers and insurance carriers; adverse rating actions by credit rating agencies; liabilities and unanticipated developments resulting from litigation and regulatory investigations and similar matters, including costs, expenses, settlements and judgments; changes in United States or foreign laws, rules and regulations including the Internal Revenue Code, and governmental or judicial interpretations thereof; our ability to favorably resolve tax matters with the Internal Revenue Service and other tax jurisdictions; changes in industry standards affecting our business; changes in accounting standards, rules and interpretations; failure to compete effectively in the money transfer industry with respect to global and niche or corridor money transfer providers, banks and other nonbank money transfer services providers, including telecommunications providers, card associations and card-based payment providers; our ability to grow our core businesses; our ability to develop and introduce new products, services and enhancements, and gain market acceptance of such products; our ability to protect our brands and our other intellectual property rights; our ability to manage the potential both for patent protection and patent liability in the context of a rapidly developing legal framework for intellectual property protection; any material breach of security of or interruptions in any of our systems; mergers, acquisitions and integration of acquired businesses and technologies into our company and the realization of anticipated synergies from these acquisitions; adverse consequences from our spin-off from First Data Corporation, including resolution of certain ongoing matters; decisions to downsize, sell or close units, or to transition operating activities from one location to another or to third parties, particularly transitions from the United States to other countries; decisions to change our business mix; cessation of various services provided to us by third-party vendors; catastrophic events; and management's ability to identify and manage these and other risks.

About Western Union

The Western Union Company (NYSE:WU) is a leader in global money transfer services. Together with its affiliates, Orlandi Valuta and Vigo, Western Union provides consumers with fast, reliable and convenient ways to send and receive money around the world, as well as send payments and purchase money orders. It operates through a network of more than 375,000 Agent locations in over 200 countries and territories. Famous for its pioneering telegraph services, the original Western Union dates back to 1851. For more information, visit [ www.westernunion.com ].

About FEXCO

FEXCO is a global payments company headquartered in Killorglin, Kerry County, Ireland with operations in Ireland, the UK, Spain, Scandinavia, Malta, Dubai, Australia and USA. The company was established in 1981 by its Executive Chairman, Brian McCarthy, and offers a range of Global Consumer Payments, Global Corporate Payments and Business Services. The company is privately owned, with Western Union currently holding a minority share in the business.

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