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MoneyGram Prices Secondary Offering

Stocks in this article: MGI

MoneyGram (NASDAQ: MGI), a leading global money transfer and payment services company announced today that the underwritten secondary public offering (the “Offering”) of an aggregate of 8,000,000 shares of MoneyGram’s common stock being sold by affiliates and co-investors of Thomas H. Lee Partners, L.P. and affiliates of Goldman, Sachs & Co. (collectively the “Selling Stockholders”) has priced at $16.50 per share. 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 receive any proceeds from the Offering. The Offering is expected to close on April 2, 2014.

Concurrently with the closing of the Offering, MoneyGram will repurchase 8,185,092 shares of common stock from affiliates and co-investors of Thomas H. Lee Partners, L.P. The share repurchase will be effected in a private, non-underwritten transaction at a price per share of common stock equal to $16.25, which is 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 $130 million in borrowings under a new incremental term loan (the “Incremental Debt Financing”) and to utilize cash for the balance. The Incremental Debt Financing will have substantially the same terms as the Company’s existing term loan, which it expects to enter into concurrently with the closing of the Offering and the share repurchase. In addition, the Company expects to enter into additional revolving credit commitments in order to increase the aggregate revolving credit commitment under its credit agreement from $125 million to $150 million. The Offering, the share repurchase and the Incremental Debt Financing are all contingent on one another.

The Company expects that the share repurchase would result in accretion of approximately $0.11 (1) on a pro forma 2013 adjusted earnings per share basis 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 acted as book-running managers for the Offering. Macquarie Capital and William Blair & Company acted as co-managers.

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