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BFD Expert Voices - Private Credit

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Western Union's Intermex acquisition will expand its retail footprint in U.S.–to‑Latin America corridors and accelerate its digital remittance business, CEO Devin McGranahan and CFO Matt Cagwin tell Axios Pro.

Why it matters: The 174‑year‑old money‑transfer giant is betting that low‑cost customer acquisition in retail will provide an edge against digital-first upstarts.

Driving the news: Western Union is shelling out $500 million in cash for Intermex, representing a 70% premium over last Friday's closing price.

This interview has been lightly edited for length and clarity.

What's the strategic rationale behind buying Intermex?

McGranahan: "There are three key planks: First, Intermex's retail operating model can improve Western Union, Vigo and OV (Orlandi Valuta) operations in North America.

Second, we believe our products and scale can supercharge their digital properties and accelerate digital.

And third, it's immediately accretive. We bought a very good business at a very reasonable price, so it's additive for our shareholders given the strength of Intermex's underlying financials."

You're paying roughly a 70% premium. What makes Intermex worth that price?

Cagwin: "If you look at the last 90 days, the average price works out to about a 50% premium. If you look at the last year, there's actually a discount to their average price over the last 12 months. 

We paid roughly five times EBITDA before synergies — something in the mid-to-high 3s post-synergies — which is a great multiple and pays for itself in less than five years."

McGranahan: "This company in '22 and '23 was trading at significantly higher levels. In a public-to-public deal, you have to meet the board's clearing price, and that was the number that let us gain control of this great asset."

Doesn't Intermex's retail strength run counter to the secular trend toward digital?

McGranahan: "Many customers still value face‑to‑face, in‑language help. One of our advantages is our ability to cost-effectively acquire customers for the first time in a retail environment.

Our pure-digital competitors rely entirely on very large marketing budgets online to do all their customer acquisition, which is why most of those competitors don't make any money."

What happens to the Intermex brand and its leadership team after close?

McGranahan: "We like the brand. It's very strong, particularly in the Latino community. So we'll keep it and will repackage their digital offering around the Intermex brand, using our products and our capabilities. 

[Intermex CEO] Bob Lisy has committed to staying on. He and his team will become central to how we lead and manage our retail operations in North America."

You've promised $30 million in cost savings within two years. Where does that come from?

Cagwin: "It'll come in fast, though a bit lumpy: merging compliance, finance and sales teams, and using our scale to win better vendor rates."

McGranahan: "These are two entirely complementary businesses, so there is little that we don't now have two of. We'll be able to eliminate most of the platform requirements of one of the two companies and get to a single platform for us in North America."

Intermex is laser‑focused on Latin America. How does that fit your global strategy?

McGranahan: "They're very strong in that corridor, but today fewer than 3% of their transactions leave Latin America. There's a big opportunity to give Intermex's agents rest-of-world capabilities, and we'll be able to turn that on pretty quickly after close."

Should we expect more corridor‑specific acquisitions?

McGranahan: "Intermex is pretty unique. However, the market is discounting traditional payments and fintech stocks, and there are similar assets in other spaces that we find attractive. 

We have an investment-grade balance sheet and produce nearly $1 billion in annual EBITDA. So we see the opportunity and will continue to pursue deals where the strategic fit is right and the transaction is value-accretive from day one."

Inside Western Union's $500M Intermex deal

The remittance giant is betting retail can fuel digital growth.

Photo illustration of Devin McGranahan and Matt Cagwin next to the Western Union logo and geometric shapes.

Western Union CFO Matt Cagwin (left) and CEO Devin McGranahan. Photo illustration: Axios Visuals. Photos: Western Union

Western Union&#x27;s Intermex acquisition will expand its retail footprint in U.S.–to‑Latin America corridors and accelerate its digital remittance business, CEO Devin McGranahan and CFO Matt Cagwin tell Axios Pro.Why it matters: The 174‑year‑old money‑transfer giant is betting that low‑cost customer acquisition in retail will provide an edge against digital-first upstarts.

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Inside Western Union's $500M Intermex deal

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