Entry into $600 Billion International Money
Transfer Market1 with Leading Technology Solution
Expands Services for PayPal’s Customers and
Accelerates Time-to-Market in Key International Markets
PayPal, 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 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
- 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.
- 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.
- Enables expansion into new markets:
Allows Xoom to expand its portfolio of send-markets by leveraging
PayPal’s wider international network.
- 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, 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 digital
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”), 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 IR@xoom.com.
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/
For PayPalInvestors:Tracey Ford,Senior Director, Investor
Relationstford@paypal.comMedia:Martha Cass, 416-860-6213Director,
Corporate Communicationsmcass@paypal.comorFor
XoomInvestors:Sharrifah Al-Salem,Director, Investor
Relationssharrifah.alsalem@xoom.comMedia:Theresa Pasinosky,Senior
Director, Global Brand Marketingtheresa.pasinosky@xoom.com
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