XXXXXX

THE MONEYGRAM LBO1

Mark Simonson wrote this case solely to provide material for class discussion. The author does not intend to illustrate either effective
or ineffective handling of a managerial situation. The author may have disguised certain names and other identifying information to
protect confidentiality.

Version: 2022-11-15

On October 19, 2021, Vahe Dombalagian, a managing director at Madison Dearborn Partners (MDP),
contacted MoneyGram International Inc. (MoneyGram) chief executive Alex Holmes to discuss the middle-
market private equity (PE) firm’s potential interest in acquiring MoneyGram in a leveraged buyout (LBO).2
Dombalagian had gained substantial experience in the digital payment business as co-head of the MDP
Financial & Transaction Services team and he believed that MDP could help the cross-border peer-to-peer
(P2P) payment firm as it worked to gain a larger share of the growing digital payment market.3

The next day, the two parties signed a confidentiality agreement and MoneyGram provided access to an
online data room so MDP could perform the due diligence required to make an offer to acquire the firm.4
On November 5, with MoneyGram’s stock trading as $5.25,5 Dombalagian flew to MoneyGram
headquarters in Dallas, Texas to meet with management. The MDP deal team was informed that there were
other potential bidders, so they needed to work quickly to finalize their offer.

STRATEGIC REVIEW

It had been almost four years since MoneyGram and Chinese fintech giant Ant Financial cancelled their
merger following a failure to obtain regulatory approval in January 2018.6 Later that year, MoneyGram
announced that it agreed to pay a $125 million fine to the US Federal Trade Commission to settle allegations
that MoneyGram fraudulently facilitated money transfers.7 This November 8, 2018 announcement caused
MoneyGram’s stock to fall 48 per cent the next day to $2.27—significantly below Ant Financial’s $18 per
share offer price in the cancelled merger (See Exhibit 1).8

In response to these setbacks, the MoneyGram board launched a “strategic review process” in January 2019
and hired financial advisor BofA Securities.9 The investment bank contacted 22 potential buyers, including
MDP, but the board declined the only offer it had received of $3.25 per share.10

Amidst the ongoing strategic review, Holmes worked to transform the firm to compete with emerging
fintech cross-border payment competitors by enhancing its digital payment products and introducing
cryptocurrency payments.11 Some analysts speculated that being taken private by a deep-pocketed PE
investor may free MoneyGram from the scrutiny of public stock market investors and allow the firm to
focus on investing in new products.12 Holmes and the MoneyGram board waited to find out if MDP might
be such a suitor.
Page 2 XXXXXX

MADISON DEARBORN PARTNERS

MDP was founded in Chicago, Illinois in 1992 when Samuel Mencoff, Paul Finnegan, and John Canning
left First Chicago Venture Capital to start the new endeavor.13 The firm was operated by raising limited
partnership funds in which MDP served as the general partner and solicited commitments of capital from
limited partners (LPs).14 LPs, typically large institutions, such as pension funds, or individuals meeting the
U.S. Securities and Exchange Commission (SEC) definition of an “accredited investor,” usually
contributed about 99 per cent of the fund’s capital.15 16

On June 8, 2021, MDP announced that it closed on its eighth fund, Madison Dearborn Capital Partners VIII
(MDCP VIII), securing $5 billion in committed capital.17 The fund targeted firms in the software, fintech,
software-as-a-service (SaaS), healthcare, and business-to-business (B2B) and P2P payments industries
requiring equity investments of between $100 million and $600 million.18 The fund’s major LPs were large
pension funds, including fund V investor California Public Employees’ Retirement System (CalPERS),
which committed $400 million to fund VIII after skipping funds VI and VII.19

The MDCP VIII LP agreement specified that the fund had a twelve-year life; in the first six years, the
partnership sought to make investments (the investment period), and in the second half, it managed and
exited its investments.20 The primary investments that buyout-focused PE funds like MDCP VIII made with
the fund’s capital were in the equity portion of LBO acquisitions—although MDP occasionally made
minority ownership investments providing “growth equity.”21

To increase their expected return, LBO PE firms utilized leverage. Thus, the PE sponsor also needed to
secure the remaining capital, generally consisting of different types of debt, including: (1) senior, secured
debt, such as loans made by banks or arranged by banks and sold to non-bank investors (syndicated loans);
and (2) junior, unsecured debt, such as public notes (junk bonds), or privately placed mezzanine financing.22
The use of leverage could dramatically increase a deal’s internal rate of return, or IRR—the primary metric
used by LBO PE firms.23

For example, in 2007 MDP acquired The Yankee Candle Company (Yankee Candle) for $1.4 billion by
investing $433 million in equity and securing debt financing for the rest of the $967 million total purchase
price.24 In 2011, Yankee Candle paid a $300 million dividend to the equity investor, the MDP fund. In
2013, MDP sold the company for $1.75 billion, resulting in a cash flow of about $1.25 billion after
subtracting the company’s estimated $500 million in remaining debt at exit. MDP realized an IRR of
approximately 26 per cent versus a 7 per cent IRR if they hadn’t used leverage.

To generate revenue, PE firms like MDP charged LPs a fixed management fee and a variable fee that was
based on a percentage of realized profits, referred to as “carried interest.”25 The management fee was
generally about 2 per cent of the fund’s committed capital and the carried interest fee was 20 per cent of
the profits after achieving any required “hurdle” rate.” A hurdle rate was a rate of return that had to be
provided to LPs before collecting any of the carried interest; most funds had an 8 per cent hurdle.

MDP charged a management fee equal to 1.5 per cent of committed capital during the investment period in
years 1-6 and a reduced 0.75 per cent fee based on funded commitments over the last 6 years.26 They also
charged the industry standard 20 per cent carried interest with an 8 per cent hurdle.27

Finally, PE firms may have had additional sources of revenue as well. For example, they may have received
dividends from portfolio companies like MDP received in the Yankee Candle LBO.28 Some PE firms also
charged the more controversial monitoring, transaction, and board compensation fees, in which they
Page 3 XXXXXX

charged fees for performing advisory services for portfolio companies, even though some argued that they
were already being compensated for this.29 MDP also reported charging such fees for these advisory
services.30

COMMITTED FINANCING
Since a potential offer would be contingent on MDP obtaining financing, the firm worked with its financial
advisors, Goldman Sachs, Deutsche Bank Securities Inc., and Barclays and obtained a debt commitment
letter.31 It planned to replace MoneyGram’s existing debt at closing with the committed financing package
shown in Exhibit 2. The senior credit facility included a $700 million senior secured term loan and a senior
secured revolving credit facility of up to $150 million. The package also included $500 million in junior
subordinated financing. In the event that the subordinated financing was not completed by the closing date,
the banks agreed to provide a temporary bridge loan until it could be completed.
In determining the equity contribution, MDP needed to consider the size of the required investment from
MDCP VIII, since PE LP agreement concentration limits generally prohibited single investments over 20-
25 per cent of fund value.32 While they wanted leverage to increase their IRR, the “Interagency Guidance
on Leveraged Lending” from the US Office of the Comptroller of the Currency advised that, based on a
target firm’s earnings before interest, taxes, depreciation, and amortization (EBITDA), deals with an
“excess of 6x Total Debt/EBITDA raises concerns for most industries.”33 To reduce the initial leverage,
MDP did not plan to draw on the revolver at closing.34
The Debt/EBITDA multiple used in this analysis was typically based on management’s calculation of
adjusted EBITDA, and the SEC required that firms explain how this figure was calculated.35 Some investors
worried that target-firm adjusted-EBITDA calculations made overly aggressive adjustments to support
higher debt levels and masked the true amount of leverage.36 MoneyGram management determined the
firm’s adjusted EBITDA calculation for 2020 and 2021, which is provided in Exhibit 3.

MONEYGRAM

MoneyGram was a global leader in the cross-border peer-to-peer (P2P) payment based in Dallas, Texas.37
Customers could send remittances—money in different global currencies—to friends and family from one
of the more than 430,000 international bricks-and-mortar locations with MoneyGram agents or digitally
using MoneyGram’s smartphone applications or the moneygram.com website.38 MoneyGram generated
revenue by charging transaction fees and profiting from currency exchange rate spreads.39

The company was founded in 1988 and by 2006 the firm had almost 100,000 retail locations.40 However,
during the financial crises in 2008, the firm lost over $1.6 billion on investments in mortgage-backed
securities and was forced to sell a majority stake to Thomas H. Lee Partners and Goldman Sachs in
exchange for a cash infusion.41 After successfully returning to profitability, MoneyGram was the target in
a bidding war by Ant Financial and Euronet Worldwide Inc. in 2017.42 MoneyGram accepted an $18 per
share offer from Ant Financial, but, after spending a year lobbying for regulatory approval, the Committee
of Foreign Investment in the United States (CFIUS) announced it was blocking the merger due to national
security concerns.43

Following the 2018 US Federal Trade Commission fraud settlement that resulted in its share price falling
below $3, Holmes worked to focus the firm on the digital payment market and the firm launched a
new smartphone money transfer application in 2019.44 In 2020, MoneyGram’s revenue fell by about 5 per
cent due to the effects of the COVID-19 pandemic, but the firm reported 5.6 per cent growth in 2021,
Page 4 XXXXXX

reaching $1.284 billion (see Exhibit 4).45 At the end of 2021, MoneyGram had $787 million in long-term
debt, and, due largely to the accompanying large interest payments, the firm reported negative net income
in each of the last three years (see Exhibits 4 and 5).

THE CROSS-BORDER P2P PAYMENT MARKET

The P2P payment market was expected to grow from $1.8 billion in 2021 to $9.3 billion in 2030, driven by
the rise of digital payments as smartphone market penetration increased, as well as the entrance of low cost
entrants, such as London-based Wise PLC (Wise) and Seattle-based Remitly Global Inc. (Remitly).46
MoneyGram expected the proportion of its payment volume coming from digital payments would grow
from about 12 per cent in 2019 to 50 per cent by 2024.47

Along with digital only fintech entrants Wise and Remitly, the other major standalone P2P competitor was
the market leader, The Western Union Company (Western Union). Western Union reported the highest
annual payment volume in 2021, and fast-growing Wise had overtaken MoneyGram for second place (see
Exhibit 6).48 Based on their revenue/EBITDA margins, the established firms reported the highest level of
profitability in 2021, with Western Union at 26 per cent and MoneyGram at 15 per cent; for the newer
entrants, Wise reported a 12 per cent margin, while Remitly had not yet reached profitability with a –8 per
cent margin (see Exhibit 7).

In 2021, MoneyGram and Western Union generated about 20 per cent of their revenue from digital
payments, while Wise and Remitly were 100 per cent digital (see Exhibit 6).49 The upstart, digital only
firms were experiencing faster growth rates largely due to their lower fees: Wise charged fees less than 1
per cent of payment volume and Remitly charged about 2 per cent, while MoneyGram charged about 3 per
cent and Western Union charged about 4 per cent (see Exhibit 6).50

Dombalagian believed that MoneyGram would be able to capitalize on its strong brand and reputation as it
rolled out its digital growth strategy.51 But chief executive Holmes noted that “cash is still relatively king
in most markets,” highlighting the value of MoneyGram’s established bricks-and-mortar business.52 “It’s
the most liquid tradable form of payment that you can have, particularly in countries where you don’t
necessarily trust the governments” he said.53

THE LBO MODEL

LBO PE firms like MDP primarily evaluated deals based on the expected gross IRR—the IRR before fees—
according to a comprehensive survey published in the Journal of Financial Economics (see Exhibit 8).54
The other primary metric used was the multiple of invested capital (equity value at exit ÷ initial equity
investment), with a median target of 2.5x (see Exhibit 8).

The study also found that PE firms rarely used the weighted average cost of capital (WACC)–based
discounted cash flow technique, which discounted future cash flows at the WACC with the cost of equity
determined using the capital asset pricing model (CAPM). Instead of setting their required IRR equal to the
levered cost of equity based on the CAPM, the PE firms reported using a median target IRR of 25 per cent.
The authors concluded that “a rough calculation suggests that this 25 per cent target exceeds a CAPM rate.”
They noted that this was consistent with the idea that PE firms must target a higher gross return to provide
a competitive return because LPs receive their returns net of fees.
Page 5 XXXXXX

According to the survey, PE firms used five-year LBO levered forecasting models and determined exit
values based on EV/EBITDA multiples of comparable firms.55 The forecasted income statements were
typically based on forecasts provided by management. However, the PE firms reported discounting
management’s projected EBITDA by a median of 20 per cent, which suggested that they believed
management tended to be overly optimistic.56 After signing a confidentiality agreement, MDP was provided
with MoneyGram’s management forecasts (se Exhibit 9).

The balance sheet for the new corporation at closing would include an equity value equal to the MDP
investment, along with the new debt financing package. MDP likely planned on treating the deal as an
acquisition of stock for tax purposes. Therefore, the carryover asset values could be used since they would
not be able to use a stepped-up asset basis for tax accounting purposes.57

The difference between the price paid for the equity and the former book value of equity could be assigned
to goodwill, likely adding to the substantial $495 million that already existed. Unfortunately for MDP, any
goodwill created in a stock acquisition could not be amortized.58 If they chose to structure the deal as an
asset acquisition for tax purposes instead, then the goodwill could be amortized over 15 years, creating a
valuable tax shield.59

Next, MDP would need to determine how fast they would be expected to be able to pay down the term loan
with their model’s future free cash flows using a “cash sweep.” 60 Finally, they would need to estimate exit
values based a range of comparable multiples for various scenarios so they could estimate expected IRRs.61

FINAL OFFER

On December 15, 2021, Reuters reported that MoneyGram was negotiating an offer with a private equity
firm, citing an anonymous source. 62 Following the publication of the story, a new potential bidder contacted
representatives of BofA Securities to express an interest in engaging in transaction discussions with
MoneyGram, citing the Reuters article published earlier that day.

MoneyGram posted a draft of a merger agreement on January 3 for MDP and any other potential bidders
to view in the online data room that MoneyGram hosted.63 The draft agreement included, a 30-day “go-
shop” provision, allowing management to solicit competing offers for 30 days following any signed offer
and a reverse termination fee payable by a buyer in the event that the transaction did not close due to the
failure to receive certain money transmitter license change of control approvals, regardless of whether such
failure was the fault of the buyer.

On January 10, the MoneyGram board informed MDP and two other potential bidders that definitive
acquisition proposals needed to be received by January 24.64
Page 6 XXXXXX

EXHIBIT 1: MONEYGRAM STOCK PRICE 12/29/2016 TO 1/10/2022

$20

$18

$16

$14

$12

$10

$8

$6

$4

$2

$0
12/29/16

10/31/17
12/31/17

10/31/18
12/31/18

10/31/19
12/31/19

10/31/20
12/31/20

10/31/21
12/31/21
2/28/17
4/30/17
6/30/17
8/31/17

2/28/18
4/30/18
6/30/18
8/31/18

2/28/19
4/30/19
6/30/19
8/31/19

2/29/20
4/30/20
6/30/20
8/31/20

2/28/21
4/30/21
6/30/21
8/31/21
Source: Created by the author based on data from S&P Global Market Intelligence and S&P Capital IQ Platform (subscription
required), accessed November 12, 2022.

EXHIBIT 2: COMMITTED FINANCING PACKAGE AND DEAL FEES, IN US$

Source Interest Rate Amount Pro Forma at Closing

5-year secured revolving credit facility Libor +3.5% 150,000,000 0
7-year senior secured term loan Libor +4% 700,000,000 700,000,000
Senior unsecured notes 9% coupon rate 500,000,000 500,000,000
Total 1,350,000,000 1,200,000,000
Expected deal fees 52,000,000

Libor, 1/10/22 0.104%

20-year US Treasury bond yield, 1/10/22 2.15%

Note: Libor = London Interbank Offered Rate.

Source: Created by the author based on MoneyGram International Inc., Schedule 14A, accessed November 10, 2022,
https://sec.report/Document/0001193125-22-113212/4, “Floating-Rate Loan Market Monitor,” Eaton Vance, accessed
November 10, 2022, https://funds.eatonvance.com/media/6140.pdf, and “1 Month London Interbank Offered Rate,”
MarketWatch, https://www.marketwatch.com/investing/interestrate/liborusd1m?countrycode=mr., “Daily Treasury Par Yield
Curve Rates,” US Department of the Treasury, https://home.treasury.gov/resource-center/data-chart-center/interest-
rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value=2022
Page 7 XXXXXX

EXHIBIT 3: MONEYGRAM ADJUSTED EBITDA 2020-2021, IN US$MILLIONS

2020 2021
(Loss) income before income taxes 6.1 -43.6
Interest expense 92.4 69.5
Depreciation and amortization 64.4 57.0
Signing bonus amortization 54.5 56.4
EBITDA 217.4 139.3

Significant items impacting EBITDA:

Legal and contingent matters 0.6 14.1
Stock-based compensation 6.6 7.3
Restructuring and reorganization costs 1.0 9.4
Compliance enhancement program 4.4 2.9
Loss on early extinguishment of debt 0.0 44.1
Severance and related costs 0.3 0.2
Direct monitor costs 11.0 4.9
Adjusted EBITDA 241.3 222.2

Total revenue 1217.2 1283.6

Adjusted EBITDA/Total revenue 20% 17%

Adjusted EBITDA 241.3 222.2

Cash payments for interest -77.5 -51.8
Cash (payments) refunds for taxes, net 1.8 -5.7
Cash payments for capital expenditures -40.8 -41.4
Cash payments for agent bonuses -58.7 -36.0
Adjusted Free Cash Flow 66.1 87.3

Note: EBITDA = earnings before interest, taxes, depreciation, and amortization.

Source: Source: MoneyGram International Inc. Form 10-K, accessed November 10, 2022,
https://www.sec.gov/Archives/edgar/data/1273931/000119312517118827/d321512ddefm14a.htm - rom321512_14

EXHIBIT 4: MONEYGRAM INCOME STATEMENTS 2019-2021, IN US$MILLIONS

2019 2020 2021

Total revenue 1,285.1 1,217.2 1,283.6
Cost of revenue 662.2 653.0 684.1
Gross profit 622.9 564.2 599.5
Selling general & administrative expenses 497.1 396.8 468.8
Depreciation and amortization 73.8 64.4 57.0
Interest expense 77.0 92.4 69.5
Loss on early extinguishment of debt 0.0 0.0 44.1
Other expenses 36.9 4.5 3.7
Earnings befor tax -64.3 6.1 -43.6
Income tax -4.0 14.0 -5.7
Net income -60.3 -7.9 -37.9

Commons stock shares outstanding 71.1 77.8 89.7

Source: MoneyGram International Inc. Form 10-K, accessed November 10, 2022, https://www.sec.gov/Archives/edgar/-
data/1273931/000119312517118827/d321512ddefm14a.htm#rom321512_14
Page 8 XXXXXX

EXHIBIT 5: MONEYGRAM BALANCE SHEETS 2019-2021, IN US$MILLIONS

2020 2021
Assets
Cash and cash equivalents 196.1 155.2
Settlement assets 3,702.9 3,591.4
Total current assets 3,899.0 3,746.6

Property and equipment 673.2 672.3

Accumulated depreciation 525.1 538.4
Property and equipment, net 148.1 133.9

Goodwill and intangible assets 497.3 494.8

Other assets 129.7 101.2

Total assets 4,674.1 4,476.5

Liabilities
Accounts payable and other liabilities 216.8 160.0
Payment service obligations 3,702.9 3,591.4
Total current liabilities 3,919.7 3,751.4

Pension and other postretirement 74.5 67.1

Lease liabilities 59.1 56.3

Long-term debt 857.8 786.7

Total liabilities 4,911.1 4,661.5

Common stock 1,296.7 1,401.0

Retained earnings -1,533.7 -1,548.1
Total equity -237.0 -185.0

Total liabilities and equity 4,674.1 4,476.5

Source: Source: MoneyGram International Inc. Form 10-K, accessed November 10, 2022,
https://www.sec.gov/Archives/edgar/data/1273931/000119312517118827/d321512ddefm14a.htm#rom321512_14
Page 9 XXXXXX

EXHIBIT 6: P2P PAYMENT INDUSTRY FIRM PERFORMANCE, 2021

2021 Annual Payment Volume in US$Billions

120
100
80
60
40
20
0
Remitly MoneyGram Wise Western
Union

2021 Digital Revenue as a percent of Revenue

120%
100%
80%
60%
40%
20%
0%
Remitly MoneyGram Wise Western
Union

2021 Digital Revenue in US $millions

1,200
1,000
800
600
400
200
-
Remitly MoneyGram Wise Western
Union

2021 Fees as a Percent of Payment Volume

5%
4%
3%
2%
1%
0%
Remitly MoneyGram Wise Western
Union
Note: P2P = peer-to-peer.
Source: Created by the author based on Laura Ingham and Daniel Webber, “Inside the MoneyGram Acquisition,”
February 17, 2022, accessed November 11, 2022, https://www.fxcintel.com/research/reports/moneygram-acquisition-
teardown-madison-dearborn-partners
Page 10 XXXXXX

EXHIBIT 7: P2P PAYMENT INDUSTRY FIRM STATISTICS, 12/31/2021, IN US$MILLIONS

Market Total 5-Year

Company Name Total Debt Cash EBITDA
Capitalization Revenue Beta
The Western Union Company 7,172 3,211 1,208 5,071 1,321 0.98
Remitly Global, Inc. 3,384 6 403 459 (37) -
Wise plc 8,774 112 417 609 71 -
International Money Express, Inc. 616 83 133 459 80 0.54
MoneyGram International, Inc. 723 843 155 1,284 198 1.52

Summary Statistics
High 616 6 133 459 (37) 0.54
Median 3,384 112 403 609 80 0.98
Low 8,774 3,211 1,208 5,071 1,321 1.52

Notes: Market Capitalization, Total Debt, and Cash are as of 12/31/2021; Total Revenue and EBITDA are for the year ended
13/31/2022; EBITDA = earnings before interest, taxes, and depreciation, P2P = peer-to-peer.
Source: S&P Global Market Intelligence, S&P Capital IQ Platform, accessed November 12, 2022, capitaliq.com (login
required)

EXHIBIT 8: SURVEY RESULTS FROM: “WHAT DO PRIVATE EQUITY FIRMS SAY THEY DO?”

Survey Question
1: Do you use this deal evaluation metric? Metric Mean Median
Gross IRR 93% 100%
Multiple of invested capital 95% 100%
Adjusted present value (APV) DCF 9% 0%
WACC-based DCF 11% 0%

2: How do you estimate exit value? Method

Comparable company EBITDA multiples 82% 100%
Compatable transaction EBITDA multiples 71% 99%
DCF-based growing perpetuity 27% 10%

3: What is your target IRR? 27% 25%

4: What is your target multiple of invested capital? 2.85x 2.5x

5: How much do you discount management EBITDA forecasts? 25% 20%

Notes: IRR=internal rate of return; DCF=discounted cash flow; WACC=weighted average cost of capital; EBITDA=earnings before
interest, taxes, depreciation, and amortization.
Source: Created by author from Paul Gompers, Steven Kaplan, and Vladimir Mukharlyamov, “What do private equity firms say they
do?,” Journal of Financial Economics, 121 (2016)
Page 11 XXXXXX

EXHIBIT 9: MONEYGRAM MANAGEMENT FORECAST, IN US$MILLIONS

2022E 2022E 2023E 2024E 2025E

Revenue 1,401 1,516 1,637 1,730 1,819

Adjusted EBITDA 243 268 306 324 348

Depreciation 62 67 73 77 81
EBIT 181 201 233 247 267

Capital Expenditures (maintenance) 45 49 53 56 59

Notes: EBIT = earnings before interest and taxes; EBITDA = earnings before interest, taxes, depreciation, and amortization.
Source: Created by the author based on MoneyGram International Inc., Schedule 14A, accessed November 10, 2022,
https://sec.report/Document/0001193125-22-113212/4
Page 12 XXXXXX

ENDNOTES

1
This case has been written based on published sources only. The interpretation and perspectives presented in this case are
not necessarily those of Madison Dearborn Partners LLC, MoneyGram International Inc., or any of its investors or employees.
2
MoneyGram International Inc., Schedule 14A, accessed November 10, 2022, https://sec.report/Document/0001193125-22-
113212/4
3
“MoneyGram Finds $1.8B Suitor in Madison Dearborn,” February 15, 2022, accessed November 11, 2022,
https://www.pymnts.com/acquisitions/2022/moneygram-finds-1-8b-suitor-in-madison-dearborn/ and Madison Dearborn
Partners web site, accessed November 12, 2022, https://www.mdcp.com/team/vahe-a-dombalagian
4
This paragraph is from MoneyGram International Inc. Schedule 14A.
5
All dollar amounts are in US dollars.
6
“MoneyGram And Ant Financial Announce Termination Of Amended Merger Agreement,” MoneyGram International Inc,
accessed November 10, 2022, https://ir.moneygram.com/news-releases/news-release-details/moneygram-and-ant-financial-
announce-termination-amended-merger
7
“MoneyGram Agrees to Pay $125 Million to Settle Allegations that the Company Violated the FTC’s 2009 Order and Breached
a 2012 DOJ Deferred Prosecution Agreement,” US Federal Trade Commission, November 8, 2018, accessed November 11,
2022, https://www.ftc.gov/news-events/news/press-releases/2018/11/moneygram-agrees-pay-125-million-settle-allegations-
company-violated-ftcs-2009-order-breached-2012
8
“MoneyGram And Ant Financial Announce Termination Of Amended Merger Agreement,” MoneyGram International Inc,
accessed November 10, 2022, https://ir.moneygram.com/news-releases/news-release-details/moneygram-and-ant-financial-
announce-termination-amended-merger and S&P Global Market Intelligence and S&P Capital IQ Platform (subscription
required), accessed November 12, 2022
9
MoneyGram International Inc., Schedule 14A.
10
MoneyGram International Inc., Schedule 14A.
11
Ryan Brown, “MoneyGram to let cryptocurrency holders cash in their investments,” CNBC, accessed November 10, 2022,
https://www.cnbc.com/2021/05/12/moneygram-to-let-cryptocurrency-traders-cash-in-their-investments.html
12
Laura Ingham and Daniel Webber, “Inside the MoneyGram Acquisition,” February 17, 2022, accessed November 11, 2022,
https://www.fxcintel.com/research/reports/moneygram-acquisition-teardown-madison-dearborn-partners
13
Kirk Falconer, “Madison Dearborn completes eighth flagship fund at $5 billion hard cap,” June 8, 2021, accessed November
12, 2022, https://www.buyoutsinsider.com/madison-dearborn-completes-eighth-flagship-fund-at-5bn-hard-cap/
14
Andrew Metrick and Ayako Yusada, “The Economics of PE Funds,” Review of Financial Studies 23, no. 6 (2010): 2303–2341.
15
According to United States Securities and Exchange Commission, “Investor Bulletin: Accredited Investors,” Investor.gov,
September 23, 2013, accessed May 25, 2017, www.investor.gov/additional-resources/news-alerts/alerts-bulletins/investor-
bulletin-accredited-investors, An accredited investor, in the context of a natural person, includes anyone who: earned income
that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same
for the current year, OR has a net worth over $1 million, either alone or together with a spouse (excluding the value of the
person’s primary residence).
16
Josh Lerner, Felda Hardymon, and Anne Leamon, “Note on Private Equity Partnership Agreements,” Harvard Business School
Publishing, 2011
17
Kirk Falconer, “Madison Dearborn completes eighth flagship fund at $5 billion hard cap,” June 8, 2021, accessed November
12, 2022, https://www.buyoutsinsider.com/madison-dearborn-completes-eighth-flagship-fund-at-5bn-hard-cap/
18
“Madison Dearborn Capital Partners VIII Overview,” accessed November 12, 2022,
https://pitchbook.com/profiles/fund/16604-83F#overview
19
Kirk Falconer, “Madison Dearborn completes eighth flagship fund at $5 billion hard cap,” June 8, 2021, accessed November
12, 2022, https://www.buyoutsinsider.com/madison-dearborn-completes-eighth-flagship-fund-at-5bn-hard-cap/
20
Ibid.
21
“Investment Portfolio,” Madison Dearborn Partners, accessed November 13, 2022,
https://www.mdcp.com/portfolio#?deal_type=growth_equity
22
Paul Gompers, Victoria Ivashina, and Joris Van Gool, “Note on Note on LBO Capital Structure, Harvard Business School
Publishing, 2013
23
Paul Gompers, Steven Kaplan, and Vladimir Mukharlyamov, “What do Private Equity Firms Say They Do?,” Journal of
Financial Economics 121, no. 3 (2016).
24
This paragraph is based on Luisa Beltran, “Madison Dearborn’s fifth fund gets an exit with Yankee Candle sale,” PE Hub,
September 3, 2013, accessed November 12, 2022, https://www.pehub.com/madison-dearborns-troubled-fifth-fund-gets-exit-
yankee-candle-sale/
25
This paragraph is based on Andrew Metrick and Ayako Yusada, “The Economics of PE Funds,” Review of Financial
Studies 23, no. 6 (2010): 2303–2341.
26
“Illinois State Treasurer’s Office investment fee schedule disclosure,” December 31, 2018, accessed November 12, 2022,
https://illinoistreasurergovprod.blob.core.usgovcloudapi.net/twocms/media/doc/external%20fee%20expense%20report_2018
.pdf
27
Ibid.
28
Luisa Beltran, “Madison Dearborn’s fifth fund gets an exit with Yankee Candle sale,” PE Hub, September 3, 2013, accessed
November 12, 2022, https://www.pehub.com/madison-dearborns-troubled-fifth-fund-gets-exit-yankee-candle-sale/
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29
Eileen Appelbaum and Rosemary Batt, “Fees, fees, and more fees: How private equity abuses its limited partners and U.S
Taxpayers,” May 2016, accessed November 1, 2019, http://cepr.net/images/stories/reports/private-equity-fees-2016-05.pdf
30
“Uniform Application for Investment Advisor Registration and Report by Exempt Reporting Advisors,” Securities and
Exchange Commission, https://reports.adviserinfo.sec.gov/reports/ADV/157349/PDF/157349.pdf
31
This paragraph is based on MoneyGram International Inc., Schedule 14A.
32
Josh Lerner, Felda Hardymon, and Anne Leamon, “Note on Private Equity Partnership Agreements, Harvard Business
School Publishing, 2011
33
“Interagency Guidance on Leveraged Lending,” Board of Governors of the Federal Reserve System, Federal Deposit
Insurance Corporation, and Office of the Comptroller of the Currency, March 21, 2013, accessed, November 1, 2019,
https://www.federalreserve.gov/supervisionreg/srletters/sr1303a1.pdf
34
MoneyGram International Inc., Schedule 14A.
35
Liz Hoffman and Matt Wirz, “The Ultimate EBITDA,” The Wall Street Journal, October 16, 2016, accessed November 1,
2019, https://www.wsj.com/articles/the-ultimate-earnings-fighting-championship-1476615601
36
Max Bower and David Brooke, “Adjusted EBITDA masks higher leverage on buyout loans,” Reuters, July 26, 2018,
Accessed November 2, 2019, https://www.reuters.com/article/us-ebitda-loans/adjusted-ebitda-masks-higher-leverage-on-
buyout-loans-idUSKBN1JW2HU
37
MoneyGram International Inc., Schedule 14A.
38
MoneyGram International Inc., Schedule 14A.
39
MoneyGram International Inc. Form 10-K, accessed November 10, 2022,
https://www.sec.gov/Archives/edgar/data/1273931/000119312517118827/d321512ddefm14a.htm#rom321512_14
40
Laura Ingham and Daniel Webber, “Inside the MoneyGram Acquisition,” February 17, 2022, accessed November 11, 2022,
https://www.fxcintel.com/research/reports/moneygram-acquisition-teardown-madison-dearborn-partners
41
Tara Lachapelle and Brooke Sutherland Matthew Monks, "MoneyGram Seen Cashing In at Decade-High Price: Real M&A,"
Bloomberg, June 13, 2013, accessed November 12, 2022, https://www.bloomberg.com/news/2013-06-21/moneygram-seen-
cashing-in-at-decade-high-price-real-m-a.html
42
Ibid.
43
Ibid.
44
Laura Ingham and Daniel Webber, “Inside the MoneyGram Acquisition,” February 17, 2022, accessed November 11, 2022,
https://www.fxcintel.com/research/reports/moneygram-acquisition-teardown-madison-dearborn-partners
45
“MoneyGram's Walk-In Business Hit By The Coronavirus As Digital Transactions Surge,” May 1, 2020, accessed
November 12,2022), https://www.pymnts.com/earnings/2020/moneygram-walk-in-business-hit-by-the-coronavirus-as-
digitaltransactions-surge/
46
“P2P Payment Market Size is predicted to Reach at USD 9,135 Billion by 2030, Registering a CAGR of 19.7%, Owing to
Increasing Smartphone Penetration and Evolving Digitalization,” Acumen Research and Consulting, accessed November 11,
2022, https://www.globenewswire.com/news-release/2022/09/06/2510984/0/en/P2P-Payment-Market-Size-is-predicted-to-
Reach-at-USD-9-135-Billion-by-2030-Registering-a-CAGR-of-19-7-Owing-to-Increasing-Smartphone-Penetration-and-
Evolving-Digitalization.html and Mark Sweney, “Fintech firm Wise valued at almost £9bn on stock market debut,” The
Guardian, accessed November 11, 2022, https://www.theguardian.com/business/2021/jul/07/fintech-firm-wise-valued-above-
8bn-on-stock-market-debut,
47
Laura Ingham and Daniel Webber, “Inside the MoneyGram Acquisition,” February 17, 2022, accessed November 11, 2022,
https://www.fxcintel.com/research/reports/moneygram-acquisition-teardown-madison-dearborn-partners
48
Ibid.
49
Ibid.
50
Ibid.
51
“MoneyGram Finds $1.8B Suitor in Madison Dearborn,” February 15, 2022, accessed November 11, 2022,
https://www.pymnts.com/acquisitions/2022/moneygram-finds-1-8b-suitor-in-madison-dearborn
52
Laura Ingham and Daniel Webber, “Inside the MoneyGram Acquisition,” February 17, 2022, accessed November 11, 2022,
https://www.fxcintel.com/research/reports/moneygram-acquisition-teardown-madison-dearborn-partners
53
Ibid.
54
Paul Gompers, Steven Kaplan, and Vladimir Mukharlyamov, “What do Private Equity Firms Say They Do?,” Journal of
Financial Economics 121, no. 3 (2016).
55
Paul Gompers, Steven Kaplan, and Vladimir Mukharlyamov, “What do Private Equity Firms Say They Do?,” Journal of
Financial Economics 121, no. 3 (2016).
56
Ibid.
57
“Asset and Stock Deals,” macabus, accessed November 22, 2022, http://macabacus.com/accounting/types-of-acquisitions.
58
Ibid.
59
Ibid.
60
Jonathan Olsen, “Note on Leveraged Buyouts,” Tuck School of Business at Dartmouth School, 2002, accessed November
1, 2019, http://pages.stern.nyu.edu/~igiddy/LBO_Note.pdf.
61
Ibid.
62
This paragraph is based on MoneyGram International Inc., Schedule 14A.
63
This paragraph is based on MoneyGram International Inc., Schedule 14A.
64
MoneyGram International Inc., Schedule 14A.