On Jul 1, 2015, shares of Euronet Worldwide, Inc. EEFT scaled a new 52-week high of $62.85 on the back of the latest acquisition and global ATM expansion.
Euronet’s one-year return of 29.00% was higher than that of other industry players like Moneygram International Inc. MGI, The Western Union Company WU and MasterCard Incorporated MA that recorded returns of -37.61%, 18.19% and 28.82%, respectively.
Last week, Euronet’s subsidiary – Ria Money Transfer – 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 World Bank, Malaysia-based IME’s 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.
On Jun 15, 2015, the company added three countries to its portfolio of Independent ATM Deployment (“IAD”) networks. These were Malaysia, Cyprus and Portugal. This expansion enhances Euronet’s position globally as the one of the fastest growing ATM deployers. Notably, this expansion is in line with Euronet’s strategy of adding more products to more ATMs in more countries.
The aforementioned developments, along with strong first-quarter earnings, drove shareholder confidence and made way for share price appreciation.
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