Fortifying its presence in Greece, MoneyGram International Inc. (MGI) announced the purchase of super-agent Advanced ChronoCash Services (ACCS) in an all stock payment deal. ACCS has been MoneyGram’s strongest agent since 2003, with over 400 locations currently across Greece.
Additionally, MoneyGram has publicized its intention to acquire MoneyGlobe Payment Institution SA, which along with ACCS is based out of Athens, Greece. However, the culmination of the deal with MoneyGlobe is dependent on the receipt of regulatory approvals.
MoneyGlobe offers cash-to-account money transfer services from Greece to Bangladesh. Other terms and value of both the deals remain undisclosed. Nonetheless, we believe that MoneyGram enjoys adequate liquidity and free cash flow that should support efficient capital deployment.
Meanwhile, the addition of ACCS and MoneyGlobe to MoneyGram’s basket not only adds to its brand value but also amplifies the company’s scope of expansion in Greece. The gradual improvement in Greece is further expected to boost MoneyGram’s growth opportunities in the country.
MoneyGram continues to bolster its position as one of the leading money transfer companies in the world by constantly expanding its payment network. Simultaneously, the company is also enhancing brand awareness by developing user-friendly payment solutions that suit the new market trends. In this regard, it has introduced various self-service products such as mobile, kiosk and online money transfer payment processes.
Led by diversified and market-compliant growth strategies, MoneyGram aims to continue achieving double-digit growth in money transfer transactions and increasing free cash flow. Going ahead, we believe that expansion through such inorganic strategies is expected to drive MoneyGram’s growth in the medium- to-long-term.
While MoneyGram carries a Zacks Rank #4 (Sell), strong peer Fleetcor Tech Inc. (FLT) holds a Zacks Rank #1 (Strong Buy) is worth cosnidering. Other outperformers of the financial sector include American Express Co. (AXP) and Global Cash Access Holdings Inc. (GCA), both of which carry a Zacks Rank #2 (Buy).