Western Union CEO: ICE raids, tariffs no threat to Intermex deal

Western Union plans to acquire digital payments company Intermex, a deal to expand Western Union's presence in Latin America and add to its digital strategy.

The agreement comes amid President Trump's trade war and a pending tax on remittances, which analysts say is hurting the cross-border market. Western Union has also said Trump's immigration policy has contributed to pressure on transaction volume. Western Union's management on Monday touted the deal, saying Intermex will add to Western Union's business and the impact of the U.S. immigration-related policies would be temporary. 

"We don't share the market's perception that the business is never going to recover from the recent ICE raids. We think we're buying a great asset with a great brand," Western Union CEO Devin McGranahan told American Banker.

What Western Union wants

In a deal announced Monday morning, Western Union will acquire the Miami-based Intermex for $16 per share in cash, representing approximately $500 million in equity and enterprise value, according to Western Union, which added that reflects a roughly 50% premium to Intermex's 90-day volume-weighted average price.

The acquisition is expected to be immediately accretive to Western Union's adjusted earning per share by more than $0.10 in the first full year post close and to generate approximately $30 million in annual run-rate cost synergies within the first 24 months, with potential further revenue gains from integrating Intermex's capabilities into Western Union's partner and customer network. Western Union's board of directors have approved the transaction, which is subject to approvals from regulators and Intermex's board. Intermex did not return a request for comment. The deal is a "unique opportunity" for Western Union to add a "well-positioned" remittance business, adding scale in historically high-growth Latin American markets, Western Union said. 

It would also expand and "stabilize" Western Union's U.S. retail footprint and use the 31-year-old Intermex's "decades of operational and cultural expertise" to boost retail growth. 

Analysts from Citizens Consumer Finance were critical of the deal. "If the primary goal is to acquire a new base of consumers to convert to digital, as was partially suggested in the news release, then this strikes us as an expensive route," Citizens Consumer Finance said in an analyst note. 

Intermex's mobile app, which speeds onboarding, is particularly attractive, McGranahan said, noting Western Union's existing technology heavily relies on desktop or laptop computers. "Intermex answers mobile queries in three seconds or less with the app," McGranahan said, adding Western Union's goal is to scale that user experience globally. 

Intermex has a broader base of independent agents in North America, which will enable Western Union to improve its retail services in North America, where McGranahan said Western Union has "underperformed" compared to its European business. "Intermex will enable our North American business to operate like our European business." 

On ICE?

In a research note, analysts at William Blair said the valuation of the Western Union/Intermex deal, 4.5 times earnings before interest, taxes, depreciation and amortization, or 7.1 times projected 2026 earnings per share, is "well below" the valuation of recent deals in payments technology, including MoneyGram's 2023 deal with Madison Dearborn Partners to go private, which was 7.5 times EBITDA. This "likely reflects geopolitical challenges within U.S.–to–Latin America corridors, the upcoming 1% tax on cash-based remittances, and continued uncertainties within the traditional retail channel; we note inbound remittance volume to Mexico rose 1% in the March quarter and fell 11% in the June quarter, per Banco de México,"  William Blair analysts said. 

In February 2025 Intermex projected 2027 targets of more than $800 million in revenue, $150 million of adjusted EBITDA and more than $3.35 of adjusted EPS. This implies at least 6.7% compound annual revenue growth and a 16% EPS CAGR, according to William Blair. 

"However, the macro environment has deteriorated since this time," William Blair said Monday.

Analysts from KeyBanc Capital Markets said the 50% premium to Intermex's 90-day volume weighted average price was not accompanied by steeper discounts.

"Notwithstanding the 50% premium cited above, we'd note the transaction multiple is a modest discount (<1x) as compared to the period immediately following Intermex's announcement of a strategic review in November 2024," KeyBanc analysts said of Intermex's initial announcement that it may sell its business. 

McGranahan said the deal price was what the market yielded. 

"It's a very attractive business at a reasonable price," McGranahan said. The Trump administration is also pressuring remittances through a 1% tax that impacts all cash-based remittances. This includes checks and money orders, which incentivizes Western Union to accelerate its move to digital transfers. Western Union reports 20% of its total revenue is from retail cash transactions, and improving digital funding could reduce that to 15%. 

"The reduction in immigration probably has more to do with the lower [Intermex deal] valuation, since a 1% tax is a relatively small amount to pass on, and users don't have a lot of good options," Aaron McPherson, principal at AFM Consulting, told American Banker. "I do think the tax could get in the way of alternatives such as stablecoins, by reducing their advantage versus traditional methods. However, they can still be used on the back end, which I believe Western Union is trying out."