MoneyGram (NASDAQ: MGI), a leading global money transfer and payment services company, announced today an underwritten secondary public offering (the “Offering”) for an aggregate of 8,000,000 shares of MoneyGram’s common stock by affiliates and co-investors of Thomas H. Lee Partners, L.P. and affiliates of Goldman, Sachs & Co. (collectively the “Selling Stockholders”). The Selling Stockholders have also granted the underwriters a 30-day option to purchase up to an additional 1,200,000 shares of common stock. The Company will not sell any shares in the Offering and will not receive any proceeds.
Additionally, the Company announced that it intends to repurchase approximately $150 million in shares of common stock from the Selling Stockholders concurrently with the closing of the Offering. The share repurchase will be effected in a private, non-underwritten transaction at a price per share of common stock equal to the midpoint between the public offering price and the price to the Selling Stockholders in the Offering. The Company expects to fund the share repurchase with borrowings under a new incremental term loan (the “Incremental Debt Financing”) having substantially the same terms as the Company’s existing term loan. The Offering, the share repurchase and the Incremental Debt Financing are all contingent on one another. In connection with the Incremental Debt Financing, the Company is seeking consents from debt investors to permit up to a total of $300 million of share repurchases from the Selling Stockholders.
The Company expects that the share repurchase would result in accretion of approximately $0.10 (1) on a pro forma 2013 adjusted earnings per share basis assuming the share repurchase is completed at the closing stock price on March 21, 2014 and after giving effect to the anticipated impact on interest expense as a result of the Incremental Debt Financing.
BofA Merrill Lynch, Wells Fargo Securities, Goldman, Sachs & Co., and J.P. Morgan will act as book-running managers for the Offering. Macquarie Capital and William Blair & Company will act as co-managers.