Great Hill Selling Custom House to Western Union

NEW YORK (Reuters) – Western Union Co (WU.N) said on Thursday it would buy Canada-based Custom House Ltd, a provider of payment solutions for small and medium enterprises, for $370 million in cash, expanding its global payments capabilities.

Custom House is owned by Chairman Peter Gustavson and Boston-based private equity firm Great Hill Partners. It will become part of the Western Union Global Payments segment.

The acquisition is expected to be dilutive to Western Union’s earnings per share in 2009 by about 1 cent. The deal is expected to close in the third quarter.

Custom House has a client base of nearly 40,000 customers with an average principal per transaction of about $25,000. It has 630 employees worldwide.

JP Morgan Securities acted as financial adviser to Western Union. Custom House was advised by Financial Technology Partners, a boutique investment bank that focuses exclusively on financial technology.

Western Union shares were up 25 cents, or 1.4 percent, at $17.88 during morning trading on the New York Stock Exchange. (Reporting by Paritosh Bansal)