Western Union buys out Fexco interest

GLOBAL money transfer services giant Western Union has acquired the equivalent business interests of Kilorglin-based financial services firm Fexco for €123.1 million.

Fexco — where former Tánaiste Dick Spring is executive vice chairman — has been one of Western Union’s leading international agents since 1990. As part of the new deal, Western Union will also surrender its 25% stake in the Co Kerry firm, which it initially acquired in 2001.

Fexco has been managing Western Union’s call centre and transaction services in seven European countries — Ireland, Britain, Spain, Denmark, Norway, Sweden and Finland — since the early 1990s. Western Union will now take over management of those operations and 300 Fexco employees will transfer to the US company. They will remain in their current working environments, but under new management.

The Irish company will still operate its multi-lingual call centre in Kilorglin, which will take Western Union custom — but much of its back office and IT support services will cease.

A spokesperson for the Co Kerry company said that while the transaction would prove to be a “shot in the arm”, it was still “tinged with regret” as Fexco did much to “pioneer” the Western Union brand over the past 18 years.

“The value of this deal is a tribute to how Fexco has helped build up the Western Union business here since 1990,” they said.

Western Union chief executive, Christina Gold paid tribute to Fexco as “a valued partner of Western Union for nearly two decades” and for playing “an important role in the expansion of our business in Europe”.

While not forced into a deal, Fexco recognised the logic as margins were shrinking and the new money will allow it to invest further in its own business model. Western Union laid off 200 people in its global workforce before Christmas and last week, reported a fall in fourth quarter profits on the back of slower demand for money transfers.

With regard to what the Co Kerry company may do with the proceeds of the sale, it is understood the focus will be mainly on building its outsourcing business in Ireland and developing new product lines.

“The transaction effectively takes away 20% of our total global workforce, so we need to keep our products up to date,” the spokesperson said, adding that Fexco would now be in a good position to make acquisitions to boost its business.