On July 1st PayPal, Inc. and Xoom Corporation (NASDAQ:XOOM), a digital money transfer provider, announced a definitive agreement under which PayPal will acquire Xoom for $25 per share in cash or an approximate $890 million enterprise value. The transaction represents a premium of 32% over Xoom’s three-month volume-weighted average price and was unanimously approved by the Boards of Directors of both companies, as well as the Board of eBay Inc., PayPal’s parent company.
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.
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Dan Schulman, President of PayPal, said, “Expanding into international money transfer and remittances aligns with our strategic vision to democratize the movement and management of money. 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.”
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PayPal is on the hunt for international acquisitions to drive growth and fend off predators, as it prepares to separate from eBay and become an independent company in the first of several big technology split-ups this year.
Chief executive Dan Schulman told the Financial Times that acquisitions would be a priority, as PayPal uses the $6bn war chest that is a legacy of the split.
“It is rare to turn up to an interview at a financial services company and find the chief executive wearing flip-flops. But Dan Schulman, in jeans and a sweater, has already fully embraced the California casual look, after less than a year in the job.
There is nothing casual about the job ahead of him, however: leading PayPal as it prepares to split from eBay and become an independent, publicly traded company.
Mr Schulman, as “CEO designee”, was hired away from American Express for this task. He has recently returned from PayPal’s investor roadshow, and still sounds a bit as if he is reading off a slide deck…
