MoneyGram 2007 Annual Report Download - page 4

Table of Contents
PART I
Item 1. BUSINESS
Corporate History and Acquisitions
MoneyGram International, Inc. ("MoneyGram," the "Company," "we," "us" and "our") is a leading global payment services company.
Our core purpose is to provide consumers with affordable, reliable and convenient payment services. We offer our products and services
to consumers and businesses primarily through our network of agents and our financial institution customers. The diverse array of
products and services we offer enables consumers, many of whom are not fully served by traditional financial institutions, to make
payments and to transfer money around the world, helping them meet the financial demands of their daily lives.
Our business is conducted through our wholly owned subsidiary formerly known as Travelers Express Company, Inc. ("Travelers"),
which has been in operation since 1940. In June 1998, we acquired MoneyGram Payment Systems, Inc. ("MPSI"), adding the
MoneyGram® branded international money transfer services to our group of services. We were incorporated in Delaware on
December 18, 2003 in connection with the June 30, 2004 spin-off from our parent company, Viad Corp ("Viad") (referred to hereafter as
the "spin-off"). In the spin-off, Travelers was merged with our wholly owned subsidiary and Viad distributed all of our issued and
outstanding shares of common stock to Viad stockholders in a tax-free distribution.
In April 2005, we acquired substantially all of the assets of ACH Commerce, LLC ("ACH Commerce"), an automated clearing house
("ACH") payment processor. The acquisition provided the technology and systems platform to expand our bill payment services.
In 2005, we consolidated the operations of Travelers with MPSI to eliminate duplication and overlapping costs of operating the two
businesses under separate corporate entities, and to complete the transition of our business from the Travelers Express brand to the
MoneyGram brand. Effective December 31, 2005, the entity that was formerly Travelers merged with and into MPSI, with MPSI
remaining as the surviving corporation and our primary operating subsidiary.
In May 2006, we completed the acquisition of Money Express S.r.l. ("Money Express"), a former super agent of our money transfer
business in Italy. The acquisition of Money Express provides us with the opportunity for further network expansion and more control of
marketing and promotional activities in the region. MoneyGram Payment Systems Italy, S.r.l. was established, which manages the former
Money Express network comprised of approximately 900 active Italian agents.
In October 2007, we completed the acquisition of PropertyBridge, Inc., a provider of electronic payment processing services for the real
estate management industry. The acquisition provides a solution in a new payment vertical and fits strategically with our build out of bill
payment services.
During 2007, we continued to develop our retail strategy in Western Europe. Due to licensing requirements and marketing constraints in
certain European countries, our preferred method of expanding the number of locations offering our services is through Company owned
retail stores and kiosks in addition to our typical agent model. In May 2006, we formed a licensed financial institution entity in France,
MoneyGram France S.A. We were granted the license in September 2006 and opened our first store in France shortly thereafter. As of the
end of 2007, we are operating 16 Company owned retail stores or kiosks in France and 30 in Germany. We expect to open additional
locations in these and other markets on a targeted basis.
Capital Transaction
During September 2007, the asset-backed securities market and broader credit markets began to experience significant disruption, with a
general lack of liquidity in the markets and deterioration in fair value of mortgage-backed securities triggered by concerns surrounding
sub-prime mortgages. In response to these concerns, the rating agencies undertook extensive reviews of asset-backed securities,
particularly mortgage-backed securities. In late November and December 2007, the asset-backed securities and credit markets
experienced further substantial
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