[July 01, 2015] |
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PayPal to Acquire Xoom
PayPal (News - Alert), Inc. and Xoom Corporation (NASDAQ:XOOM), a digital money
transfer provider, today 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 (News - Alert) 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.
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."
John Kunze, President and Chief Executive Officer of Xoom, remarked,
"Becoming part of PayPal represents an exciting new chapter for Xoom,
which will help accelerate our time-to-market in unserved geographies
and expand the ways we can innovate for customers. Being part of a
larger, global organization will help us deliver the best possible
experience to our customers, while maximizing value for our
shareholders."
Expected Strategic Benefits of the Xoom Acquisition
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Extends PayPal's offering to its customers: Broadens PayPal's consumer
offering to its 68 million active U.S. customers by cross-selling
Xoom's services.
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Accelerates time-to-market: Xoom's proprietary and fast "funds-out"
network enables PayPal to enter this growing marketplace with a
leading technology solution with strong presence in key international
markets.
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Enables expansion into new markets: Allows Xoom to expand its
portfolio of send-markets by leveraging PayPal's wider international
network.
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Delivers a strong technology platform: Xoom's compelling and reliable
technology platform and consumer experience are coupled with its
excellent customer service.
Financial Highlights of Acquisition
Due to anticipated one-time integration costs, the completion of the
transaction is expected to be slightly dilutive to PayPal's non-GAAP
earnings per share for FY 2016. PayPal intends to fund the transaction
with cash on its balance sheet.
Upon closing of the acquisition, Xoom will operate as a separate service
within PayPal. The acquisition is expected to close in the fourth
quarter of 2015, subject to customary closing conditions, including Xoom
stockholder approval, the expiration or early termination of the
applicable pre-merger waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 and the receipt of certain consents
relating to Xoom's money transmitter licenses.
Holders of approximately 18% of Xoom's outstanding shares, including all
executive officers and directors of Xoom and certain entities affiliated
with Sequoia Capital (News - Alert), have entered into voting and support agreements
with PayPal pursuant to which they have agreed to vote in favor of the
transaction.
J.P. Morgan Securities LLC is acting as financial adviser to PayPal,
while Sidley Austin LLP is acting as its legal adviser with regard to
the transaction. Qatalyst Partners is acting as financial adviser to
Xoom, while Goodwin Procter LLP is acting as its legal adviser.
About PayPal
At PayPal, we put people at the center of everything we do. Founded in
1998, we continue to be at the forefront of the digtal payments
revolution, processing almost 12.5 million payments for our customers
per day. PayPal gives people better ways to connect to their money and
to each other, helping them send money without sharing financial
information and with the flexibility to pay using their PayPal account
balances, bank accounts, PayPal Credit and credit cards. With our 165
million active customer accounts, we have created an open and secure
payments ecosystem people and businesses choose to securely transact
with each other online, in stores and on mobile devices. PayPal is a
truly global payments platform that is available to people in 203
markets, allowing customers to get paid in more than 100 currencies,
withdraw funds to their bank accounts in 57 currencies and hold balances
in their PayPal accounts in 26 currencies.
PayPal is in the process of being separated from eBay Inc.
(NASDAQ:EBAY). Upon completion of the separation, which is expected to
occur on July 17, 2015, PayPal will be an independent, publicly traded
company listed on the NASDAQ Stock Market under the ticker "PYPL." More
information about PayPal can be found at www.paypal.com
and www.paypal-corp.com.
More information about the planned separation of eBay and PayPal can be
found at update.ebayinc.com.
About Xoom
Xoom is a leading digital money transfer provider that enables consumers
to send money, pay bills and send mobile reloads to family and friends
around the world in a secure, fast and cost-effective way, using their
mobile phone, tablet or computer. During the 12 months ended March 31,
2015, Xoom's more than 1.3 million active customers sent approximately
$7.0 billion with Xoom. The company is headquartered in San Francisco
and can be found online at www.xoom.com.
Forward Looking Statements
This announcement contains forward-looking statements, including
statements about the expected impact of this transaction on PayPal's and
Xoom's financial and operating results and business, the operation and
management of Xoom after the acquisition, the anticipated funding for
the transaction, and the timing of the closing of the acquisition.
Although PayPal and Xoom believe that the assumptions upon which their
respective forward-looking statements are based are reasonable, these
statements involve risks and uncertainties, and actual results could
differ materially from those discussed. Factors that could cause or
contribute to such differences include, but are not limited to, the
receipt and timing of regulatory approvals for the transaction, the
possibility that the transaction may not close, the reaction to the
transaction of Xoom's customers and business partners, the reaction of
competitors to the transaction, the retention of Xoom employees,
PayPal's plans for Xoom, economic conditions in the global markets in
which PayPal and Xoom operate, the future growth of Xoom's and PayPal's
businesses and the possibility that integration following the
transaction may be more difficult than expected.
More information about these and other factors can be found in PayPal
Holdings, Inc.'s Registration Statement on Form 10, as amended from time
to time, and its future filings with the Securities and Exchange
Commission (the "SEC (News - Alert)"), and Xoom's most recent Annual Report on Form
10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and
other filings with the SEC. Neither PayPal nor Xoom accept any
responsibility for any financial or operational information contained in
this press release relating to the business, results of operations or
financial condition of the other. Each of PayPal and Xoom expressly
disclaims any obligation or undertaking to disseminate any updates or
revisions to any forward-looking statements contained herein to reflect
any change in the expectations with regard thereto or any change in
events, conditions or circumstances on which any such statement is based.
Additional Information and Where to Find It
This communication is being made in respect of the proposed merger
transaction involving PayPal and Xoom. This communication does not
constitute an offer to sell or the solicitation of an offer to buy any
securities or the solicitation of any vote or approval. The proposed
merger will be submitted to Xoom stockholders for their consideration.
In connection therewith, Xoom intends to file relevant materials with
the SEC, including a proxy statement on Schedule 14A. BEFORE MAKING ANY
VOTING OR ANY INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS ARE
URGED TO READ THE PROXY STATEMENT REGARDING THE PROPOSED TRANSACTION AND
ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC,
CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE, BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors and security holders may obtain copies of the proxy statement,
any amendments or supplements thereto, and other documents containing
important information about Xoom, once such documents are filed with the
SEC, free of charge at the SEC's website at http://www.sec.gov.
In addition, investors and security holders may obtain free copies of
the documents filed with the SEC by Xoom on Xoom's investor relations
website at https://ir.xoom.com
or by contacting Xoom investor relations at [email protected].
Participants in Solicitation
Xoom and its directors and executive officers may be deemed to be
participants in the solicitation of proxies of Xoom stockholders in
connection with the proposed transaction. Information about the
directors and executive officers of Xoom is set forth in Xoom's
definitive proxy statement for its 2015 annual meeting of stockholders
filed with the SEC on April 14, 2015 and in subsequent documents to be
filed with the SEC, each of which can be obtained free of charge from
the sources indicated above. Other information regarding Xoom's
participants in the solicitation and a description of their direct and
indirect interests, by security holdings or otherwise, will be contained
in the proxy statement relating to the proposed transaction and other
relevant materials to be filed by Xoom with the SEC when they become
available.
1 The World Bank Global Remittances 2016 estimate
View source version on businesswire.com: http://www.businesswire.com/news/home/20150701006690/en/
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