Western Union to Buy Travelex Payments Unit for $976 Million

Western Union Co., the world’s largest money-transfer firm, agreed to buy a business-payments division of London-based Apax Partners LLP’s Travelex for 606 million pounds ($976 million).

The Travelex Global Business Payments unit handles transactions for 35,000 customers a year in 14 countries, Englewood, Colorado-based Western Union said today in a statement. The unit is expected to produce 150 million pounds in revenue this year, according to the statement.

“Adding Travelex Global Business Payments provides us immediate scale,” expanding on a 2009 acquisition that gave Western Union a start in business-to-business international payments, Chief Executive Officer Hikmet Ersek, 50, said in a telephone interview. “We are serving again here the underserved, these are small importers or exporters which have difficulties doing their cross-border payments.”

Western Union has relied on consumer-to-consumer services to generate 84 percent of the firm’s $1.28 billion revenue in the first quarter, according to the company’s financial report. Travelex has described its business-payments unit as the world’s largest non-bank provider of foreign exchange and risk solutions.

Ersek has been expanding Western Union’s operations in Europe. The company said last month it would buy the rest of Finint Srl, an Italian money-transfer firm. This year, it also spent $136 million to complete a takeover of Angelo Costa Srl, another Italian company that does money-transactions, according to a regulatory filing.

Founded in 1976, Travelex serves consumers through a network of more than 950 stores and 450 automated teller machines, according to a May statement on its website. It handles about 20 billion pounds of foreign exchange transactions annually.

The all-cash acquisition is expected to be completed in late 2011, according to the statement.