SAN JOSE, Calif. & SAN FRANCISCO -- PayPal Inc. and Xoom Corp., a digital money transfer provider, have announced a definitive agreement under which PayPal will acquire Xoom for $25 per share in cash or an approximate $890 million enterprise value.
The boards of both companies, as well as the board of eBay Inc., PayPal’s parent company., have approved the transaction.
Xoom is a leader in international remittances enabling customers in the United States to send money to, and pay bills for, family and friends around the world in a secure, fast and cost-effective way, using their mobile phones, tablets or computers.
“Expanding into international money transfer and remittances aligns with our strategic vision to democratize the movement and management of money," Dan Schulman, President of PayPal, said. "Acquiring Xoom allows PayPal to offer a broader range of services to our global customer base, increase customer engagement and enter an important and growing adjacent marketplace. Xoom’s presence in 37 countries--in particular, Mexico, India, the Philippines, China and Brazil--will help us accelerate our expansion in these important markets.”
John Kunze, president and CEO of Xoom, said, “Becoming part of PayPal represents an exciting new chapter for Xoom, which will help accelerate our time-to-market in unserved geographies and expand the ways we can innovate for customers. Being part of a larger, global organization will help us deliver the best possible experience to our customers, while maximizing value for our shareholders.”
Expected strategic benefits of the Xoom acquisition include:
*Extends PayPal’s offering to its customers: Broadens PayPal’s consumer offering to its 68 million active U.S. customers by cross-selling Xoom’s services.
*Accelerates time-to-market: Xoom’s proprietary and fast “funds-out” network enables PayPal to enter this growing marketplace with a leading technology solution with strong presence in key international markets.
*Enables expansion into new markets: Allows Xoom to expand its portfolio of send-markets by leveraging PayPal’s wider international network.
*Delivers a strong technology platform: Xoom’s compelling and reliable technology platform and consumer experience are coupled with its excellent customer service.
PayPal intends to fund the transaction with cash on its balance sheet. Upon closing of the acquisition, Xoom will operate as a separate service within PayPal. The companies expect the acquisition to close in fourth-quarter 2015, subject to customary closing conditions, including Xoom stockholder approval and the receipt of certain consents relating to Xoom’s money transmitter licenses.
During the 12 months ended March 31, 2015, San Francisco-based Xoom’s more than 1.3 million active customers sent approximately $7 billion with Xoom.
Founded in 1998, PayPal processes approximately 12.5 million payments per day. PayPal gives people a way to connect to their money and to each other, helping them send money without sharing financial information and with the flexibility to pay using their PayPal account balances, bank accounts, PayPal Credit and credit cards. With 165 million active customer accounts, PayPal has created an open and secure payments ecosystem people and businesses choose to securely transact with each other online, in stores and on mobile devices. PayPal is a global payments platform available to people in 203 markets, allowing customers to get paid in more than 100 currencies, withdraw funds to their bank accounts in 57 currencies and hold balances in their PayPal accounts in 26 currencies.
San Jose, Calif.-based PayPal is in the process of being separated from eBay Inc. Upon completion of the separation, which the companies expect to occur on July 17, 2015, PayPal will be an independent, publicly traded company listed on the NASDAQ Stock Market under the ticker “PYPL.”
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.