Euronet Worldwide, Inc.’s EEFT subsidiary Ria Money Transfer has acquired money transfer provider IME (M) Sdn Bhd ("IME") in a cash and stock transaction. The acquisition marks Ria’s foray into new markets of the Middle East and Malaysia.
Per a report by the World Bank Malaysia-based IME, current markets account for approximately $115 billion in remittances per year. It also boasts double-digit growth rates in the South Asian market. The addition of IME to the acquirer’s portfolio will increase its network by 71 stores and 17,000 locations.
With about $40 million in annual revenues, IME will be merged into Euronet’s money transfer segment. The acquisition will add 8–10 cents per share to Euronet’s cash earnings in the first full year of operation.
By amalgamating its presence with IME, Ria is well positioned to repeat its success story in the U.S. and Europe in these regions. Both being money transfer companies, the acquisition complements Ria’s portfolio along with adding new send markets and payout locations.
Moreover, Ria has proven itself as a successful entrant to new regions, where it has consistently gained market share. Therefore with the addition of nine new send countries in Asia and the Middle East, Ria is expected to increase its share there too.
On the other hand, IME’s customers will have easy access to Ria’s 246,000 locations across the globe with added money transfer capabilities and distribution. Moreover, IME stands to benefit from Euronet`s strong balance sheet. The merger will also help to boost IME`s growth trajectory.
Last year in May, Euronet acquired U.K.-based HiFX. This acquisition will enhance Ria’s product basket by including online-initiated, account-to-account international payment and foreign exchange services to high-income individuals and small-to-medium sized businesses.
In the meantime, Euronet continues with its efforts to enhance its growth profile. Earlier this month, Euronet added three new countries – Malaysia, Cyprus and Portugal – to its portfolio of Independent ATM Deployment networks. The new ATMs hence expand Euronet's position as the world's fastest growing and most geographically diverse independent ATM deployer.
Euronet Worldwide currently sports a Zacks Rank #1 (Strong Buy).
Other Stocks to Consider
Investors interested in the sectors can also have a look at Blackhawk Network Holdings, Inc. HAWK, Regional Management Corp. RM, SLM Corporation SLM. While Regional Management shares the Zacks Rank with Euronet, Blackhawk Network and SLM Corporation carry a Zacks Rank #2 (Buy).
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