By Josh Beckerman 

PayPal Inc. has agreed to buy digital money transfer company Xoom Corp. in deal with an enterprise value of $890 million, a move that the company said will enhance PayPal's international presence.

The $25-a-share deal offers a 21% premium to Xoom's Wednesday closing price of $20.70. In after-hours trading, Xoom shares recently changed hands at $22.21.

PayPal, which is in the process of being separated from eBay Inc., said "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."

For the 12 months ended March 31, San Francisco-based Xoom had more than 1.3 million active customers who sent about $7 billion via Xoom. In the quarter ended March 31, revenue rose 24% to $44.4 million, and the company projected revenue of $191 million to $196 million for 2015.

Xoom was founded in 2001 and went public in 2013.

Write to Josh Beckerman at josh.beckerman@wsj.com

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