Britain’s biggest foreign exchange specialist is selling its global payments division to Western Union, the world’s largest payment transfer company, for £606 million in cash.
The sale means that Travelex will shed most of its corporate business, leaving it with a consumer division best known for its foreign exchange booths at airports.
The sale of the division, which helps businesses to make payments to each other as well as providing foreign exchange services, marks the latest stage in the chief executive Peter Jackson’s plan to shed unstrategic businesses so that the group can develop in rapidly expanding regions.
Travelex, which is majority-owned by the private equity firm Apax, snapped up Brazil’s largest foreign exchange business, Grupo Confidence, in May for £140 million.
It said that it would use the cash raised from the sale of its payments division to develop its consumer foreign exchange business and to reduce debt.
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The business is looking at opportunities in Asia, Latin America and the Middle East, where the rising middle-class populations are travelling more, increasing the demand for foreign currency.
Travelex began as a single shop in Central London opened in 1976 by Lloyd Dorfman. He spotted an opportunity to tempt customers away from banks by opening an independent bureau de change.
After three years in London he opened an outlet in a motorway service station on the M2, to serve people driving from the capital to the Channel ports.
Today the group has almost 800 branches at 100 airports and is the world’s biggest wholesale foreign exchange supplier outside the banks. Mr Dorfman retains a 26 per cent stake.
In December Travelex sold its prepaid cashcard business to MasterCard for £290 million. The business provides prepaid “cash passports” for travellers that can be used at cash machines or to make purchases. Travelex still sells these but decided that it was more economical for MasterCard, the world’s second-largest credit and debit card processing company, to manufacture them.
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Travelex’s underlying earnings rose 9 per cent to £131 million last year.