MoneyGram 2009 Annual Report Download - page 4

Table of Contents
PART I
Item 1. BUSINESS
Overview
MoneyGram International, Inc. (together with our subsidiaries, "MoneyGram," the "Company," "we," "us" and "our") is a leading global
payment services company. Our major products include global money transfers, bill payment solutions and money orders. We help
people and businesses by providing affordable, reliable and convenient payment services.
The MoneyGram® brand is recognized throughout the world. We offer more choices and more control for people separated from friends
and family by distance or those with limited bank relationships to meet their financial needs. Our payment services are available at
approximately 190,000 agent locations in approximately 190 countries and territories. Our services enable consumers throughout the
world to transfer money and pay bills, helping them meet the financial demands of their daily lives. Our payment services also help
businesses operate more efficiently and cost-effectively.
History and Development
We conduct our business primarily through our wholly owned subsidiary MoneyGram Payment Systems, Inc. ("MPSI"). Through its
predecessor, Travelers Express Company, Inc. ("Travelers Express"), MPSI has been in operation for nearly 70 years. Travelers Express
acquired MPSI in 1998, adding the MoneyGram brand to our Company and adding international money transfer services to our payment
service offerings. In 2005, we consolidated the operations of Travelers Express with MPSI to eliminate costs of operating the two
businesses under separate corporate entities. This completed the transition of our business from the Travelers Express brand to the
MoneyGram brand, and we retired the Travelers Express brand.
In 2006, our subsidiary MoneyGram Payment Systems Italy, S.r.l. acquired the assets of Money Express S.r.l., our former super-agent in
Italy. We also developed a retail strategy in Western Europe to offer our services through Company-owned retail stores and kiosks in
addition to our typical agent model. Our subsidiary in France, MoneyGram France S.A., became a licensed financial institution in
September 2006. As of December 31, 2009, we operate 32 Company-owned retail stores or kiosks in France and 33 in Germany. In 2007,
we completed the acquisition of PropertyBridge, Inc. ("PropertyBridge"), a provider of electronic payment processing services for the
real estate management industry.
In March 2008, we completed a recapitalization pursuant to which we received an infusion of $1.5 billion of gross equity and debt
capital. The equity component of the recapitalization consisted of the sale to affiliates of Thomas H. Lee Partners, L.P. ("THL") and
affiliates of Goldman, Sachs & Co. ("Goldman Sachs," and collectively with THL, the "Investors") in a private placement of
760,000 shares of Series B Participating Convertible Preferred Stock of the Company (the "B Stock") and Series B-1 Participating
Convertible Preferred Stock of the Company (the "B-1 Stock," and collectively with the B Stock, the "Series B Stock") for an aggregate
purchase price of $760.0 million. We also paid Goldman Sachs an investment banking advisory fee equal to $7.5 million in the form of
7,500 shares of B-1 Stock.
As part of the recapitalization, our wholly owned subsidiary, MoneyGram Payment Systems Worldwide, Inc. ("Worldwide"), issued
Goldman Sachs $500.0 million of senior secured second lien notes with a 10-year maturity (the "Notes"). We also entered into a senior
secured amended and restated credit agreement with JPMorgan Chase Bank, N.A. ("JPMorgan") as agent for a group of lenders, bringing
the total facility to $600.0 million (the "Senior Facility"). The amended facility included $350.0 million in two term loan tranches and a
$250.0 million revolving credit facility. See "Management's Discussion and Analysis of Financial Condition and Results of Operations —
Recapitalization" for further information regarding the recapitalization.
In 2008, we completed the acquisition of MoneyCard World Express, S.A. ("MoneyCard") and Cambios Sol, S.A., two money transfer
super-agents located in Spain. Thereafter, we merged Cambios Sol, S.A. into MoneyCard and now maintain MoneyCard as our
subsidiary. In 2009, we acquired the French assets of R. Raphaels & Sons PLC
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