Western Union to buy Travelex unit

The Western Union Company said Tuesday it has agreed to acquire Travelex Global Business Payments for about US$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 payment services to business clients, mostly small and medium-size companies and distribution partners.

Western Union is paying £606 million for the Travelex business. It is expected to boost Western Union's earnings by two cents per share this year and four cents per share in 2012.

The company expects acquisition-related non-cash amortisation expenses of about US$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, Colorado. Travelex is based in London and is a unit of Travelex Holdings Limited.

- AP