MoneyGram Payment Systems goes public on New York Stock Exchange

Business Wire, Dec 11, 1996

NEW YORK--(BUSINESS WIRE)--Dec. 11, 1996--

NOTE: Photos and video available: Video footage of MoneyGram officials at the New York Stock Exchange, plus B roll, will be fed from 2:30-2:45 p.m. (ET) and can be accessed through Telstar 401, Transponder 19; NR Loop #102362 and Waterfront #1630. Photos will be provided to Associated Press, New York. Additional photos can be obtained by request.

MoneyGram Payment Systems Inc. (NYSE:MNE) today completed its Initial Public Offering (IPO) when 14.4 million common shares of stock priced at $12 per share, were issued on the New York Stock Exchange (NYSE) for public trading.

The former subsidiary of First Data Corp. (FDC) is the second largest worldwide money transfer service. It provides services within the United States and to 85 countries, utilizing a network of nearly 20,000 agents.

The MoneyGram(SM) money transfer service delivers funds within minutes nearly anywhere in the world. Consumers also receive a free telephone call to notify the recipient that the funds are available and a free 10-word message to send with the transaction. All are service innovations created by the company.

"Going public is a major step because we can now direct our entire focus to addressing the marketplace demand for outstanding quality and superior value as well as continue to provide product innovations. This is what competition encourages and our management team, with long experience in the industry, understands this," said James F. Calvano, MoneyGram chairman and chief executive officer.

FDC had been operating MoneyGram under terms of a consent decree issued by the Federal Trade Commission (FTC) after First Data's acquisition of Western Union, the other major industry provider. Western Union had been owned by First Financial Management which merged with FDC in 1995. The FTC ruled that First Data had to divest one of the competitors by January of 1997. Net proceeds from the sale went to First Data. A preliminary prospectus regarding the IPO had estimated an initial price range for the offering at $15 to $17 per share.

"Clearly, ownership of the two competitors by First Data was confusing to agents no matter how we were managed," said Calvano. "Now, we will operate independently with a management team that includes senior level executives from Western Union and MoneyGram. This management depth is unparalleled in our industry and we believe that we have the right combination of management, products and innovative thinking to challenge a competitor whose ownership is more attuned to processing transactions for large businesses and institutions than it is to the consumer marketplace."

The funds transfer market, in which MoneyGram competes, has been growing at double digit rates for several years, spurred by growth in the segment of the U.S. population which does not maintain traditional banking relationships. Industry analysts believe that some 25-30 percent of the population falls into this category.

Population and immigration patterns also suggest that these trends will continue for both the domestic and international money transfer markets.

The company also provides the MoneyGram(SM) Phone Card, supported by the MCI network, and ExpressPayment, a service that allows consumers to transfer funds instantly to creditors.

MoneyGram will go public on a debt free basis.

The underwriting group for the transaction was led by Morgan Stanley & Co. Inc., Lehman Brothers, Montgomery Securities and Smith Barney Inc.

MoneyGram provides consumer funds transfer and other services to 85 countries over a network of nearly 20,000 agents. It is headquartered in Lakewood, Colo. and Saddlebrook, N.J. -0-

These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

CONTACT: MoneyGram Payment Systems Inc.

Gary P. Tobin, 212/685-7077