(Reuters) - Moneycorp, a British foreign exchange provider, said on Wednesday it had agreed to buy U.S.-based corporate payments business Commonwealth Foreign Exchange to extend the reach of its payments platform and help it win new customers.
The British firm has pushing into a number of overseas markets and last year introduced a corporate offering in Spain, launched a full branch in Romania and signed a commercial partnership with global news firm CNN.
Moneycorp, which had revenues of about $140 million in 2016, did not disclose the terms of the deal.
Chief financial and operations officer Nick Haslehurst told Reuters that the firm would fund 20 percent of the deal using cash on hand, while 80 percent would be backed by external financing.
Providence, Rhode Island headquartered Commonwealth had revenues of about $20 million last year and serves over 4,000 customers in the United States, enabling the movement of over 3 billion dollars across the world.
Moneycorp said the Commonwealth acquisition would allow it to add small- and medium-sized U.S. customers by rolling out its specialist forex technology and platform through Commonwealth’s network.
“I think, in the United States, the provision of cross-border banking, payments and FX services by the big mainstream banks doesn’t service that SME and midcap market in the U.S. particularly well,” Haslehurst said.
“Having acquired Commonwealth the ability to leverage their licensing structure and sales team to roll out Moneycorp’s transparent, fast, efficient service provision, we believe will give us a big advantage for customer acquisition.”
Moneycorp, which offers telephone and online payments, traded 25 billion pounds worth of currencies and handled over 7 million transactions in 2016.
The deal, which requires regulatory clearance in the United States, is expected to close around September or October.
KPMG was financial adviser to Moneycorp, while Holland & Knight and Shearman & Sterling were legal advisers. Raymond James advised Commonwealth.
Haslehurst said that Moneycorp was keen to strike one more deal in 2017, with a preference to buy in the Americas, but did not intend to overpay.
Reporting by Esha Vaish in Bengaluru; editing by Jason Neely