Western Union has closed the
acquisition of Custom House in a $350 million cash deal that
provides its first entry into the international
business-to-business (B2B) payments market.
“This acquisition makes Western Union an instant player in the
business-to-business payments space and its account-to-account
capabilities complement our existing services,” commented Ranjana
Clark, Western Union’s president, global business payments and head
of global strategy.
Focused on small and medium enterprises, the 17-year old
Canadian-based Custom House processes cross-border payments for
more than 40,000 customers through its multi-channel delivery
system for payout in 120 countries and over 150 currencies. The
bulk of Custom House’s business is derived from senders in Canada,
the US, the UK, Italy, Australia, Singapore and New Zealand with
the average principal per transaction being about $25,000.
Despite its large customer base Custom House is a relatively small
player and currently has a modest annualised revenue run rate of
only $100 million. However, Western Union sees considerable growth
potential in an international B2B market which it estimates
generates total revenue at least as great as the
consumer-to-consumer money transfer market.
“Custom House opens up a world of opportunity for its customers,”
said Western Union’s president and CEO, Christina Gold. “It enables
small and medium-sized businesses to operate on a global scale,
simplifying international payment transactions and managing the
risks associated with foreign exchange. We believe that leveraging
the brand, global footprint and financial strength of Western Union
will enable Custom House to accelerate its international expansion
Among Custom House’s more unusual clients is PGA Tour, the
organisation operating the main professional golf tours in the US.
As official foreign exchange provider of the PGA Tour, Custom House
is responsible for processing tour and player business in dozens of
events offering total prize money of over $300 million
Custom House has been rebranded under the Western Union umbrella of
services and continues to be headquartered in Victoria, British
Columbia under the leadership of its existing management