- Key insights: Western Union's acquisition of International Money Express hit another roadblock on Friday when California's key regulator said it was suspending its previous approval of the deal. That suspension came the same day that New York regulators — the last holdout — gave it a green light.
- What's at stake: The acquisition was first announced a year ago and has been delayed as regulators in New York withheld their approval of the acquisition amid calls from New York City Mayor Zohran Mamdani to block it.
- Forward look: Western Union and Intermex have said that they intend to "engage promptly" with the California Department of Financial Protection and Innovation to address its questions.
Western Union's
The suspension came on the same day that the New York State Department of Financial Services gave the acquisition a green light. The NYDFS was the last regulator to approve the deal after
It's "one step forward, one step back" for the deal, according to William Blair analyst Cristopher Kennedy.
"Initially, we understood that the New York State approval was the final regulatory hurdle for the $16.00 per share cash offer (about $500 million enterprise value)," Kennedy said. "However, the suspension from DFPI will cause additional delays."
California's DFPI said it suspended an approval extension it previously granted on July 31 because it needed to "further review the transaction as a result of the intervening six months since approval was originally granted" and "further examine the impact of the proposal on operations in this state," according to Western Union. Western Union and Intermex have said that they intend to "engage promptly" with the DFPI to address its questions.
Many of Intermex's customers and revenue come from the Southeast and West Coast regions of the country, according to Kennedy. California is also a key growth initiative for the company, which "make the DFPI more consequential," he said.
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In order to secure approval from New York's regulator, Western Union agreed to maintain a physical presence in areas where Intermex operates for three years following the closing of the deal. It also promised to continue service to high-volume Latin American remittance destinations and limit price increases to solely inflation adjustments, according to William Blair. The company also agreed to certain reporting requirements with the regulator and to a third-party audit to ensure compliance with the agreement.
Western Union's issue with the DFPI is the latest headwind to face the acquisition, which was first announced about a year ago. Last week, Intermex reported a
