Thomas H. Lee Partners and Goldman Sachs sell MoneyGram shares via secondary offering

Money transfer firm MoneyGram has priced its secondary offering of 8 million shares at $16.50 per share. The shares are being sold by stockholders Thomas H. Lee Partners and Goldman Sachs. BofA Merrill Lynch, Wells Fargo Securities, Goldman Sachs, and J.P. Morgan are the lead underwriters. Also, upon closing of the transaction, which is expected to occur on April 2, 2014, MoneyGram will repurchase over 8.1 million shares of common stock from Thomas H. Lee Partners at $16.25 per share in a private placement.

PRESS RELEASE

DALLAS–(BUSINESS WIRE)–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.
The Offering is being made only by means of a prospectus supplement. The issuer has filed a registration statement with the Securities and Exchange Commission (the “SEC”) for the Offering. Before you invest, you should read the prospectus and prospectus supplement in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and the Offering. You may obtain these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively a copy of the prospectus supplement may be obtained by contacting BofA Merrill Lynch, Attn: Prospectus Department, 222 Broadway, New York, NY 10038, email: dg.prospectus_requests@baml.com; Wells Fargo Securities, Attn: Equity Syndicate Department, 375 Park Avenue, New York, NY 10152, email: cmclientsupport@wellsfargo.com; Goldman, Sachs & Co., Attn: Prospectus Department, 200 West Street, New York, NY 10282, email: prospectus-ny@gs.com; or J.P. Morgan, Attn: Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717.
(1) Pro forma FYE2013 accretion based on the following assumptions: reported 2013 adjusted EPS of $1.34; fully-diluted outstanding share count of 71.9mm; $133mm share repurchase at a purchase price per share of $16.25 funded via new $130mm Term Loan B, with pricing of Libor plus 3.25% (including 1.00% Libor floor), and cash; approximately $1 million of estimated annual incremental deferred financing costs; and a 40% tax rate.
About MoneyGram International
MoneyGram International, a leading money transfer company, enables consumers who are not fully served by traditional financial institutions to meet their financial needs. MoneyGram offers money transfer services worldwide through a global network of 336,000 agent locations – including retailers, international post offices and financial institutions – in more than 200 countries and territories. MoneyGram also offers bill payment services in the United States and Canada. MoneyGram is listed on the NASDAQ Global Select Market under the ticker symbol MGI.