Boston buyout shop Thomas H. Lee Partners LPand Goldman, Sachs & Co. are betting that things have hit bottom for MoneyGram International Inc., as they finalized Tuesday their equity investment in the company. The recap of $710 million to $770 million will give them 63% of the beleaguered money transfer company. Goldman is also providing MoneyGram up to $500 million in debt financing.
While subprime-related losses battered MoneyGram's balance sheet, Wall Street has battered the share price, which is down 64% since the start of the year. MoneyGram has swallowed a $380 million loss on the $1.8 billion of its portfolio securities its already sold. But the pain isn't yet over as TH Lee is requiring it to sell another $1.9 billion of the securities into a market where "subprime" is a four-letter word. Nor do shareholders seem particularly happy with the deal, as the stock is down about 5.8% in late day trading.
Additional coverage will come later in The Daily Deal and on TheDeal.com. - George White
See story from TheDeal.com
See press release
See Jan. 16 Dealscape post on MoneyGram
