Q&A with Robert Metzger

Q&A with Robert Metzger

US-based investment banking firm William Blair's Robert Metzger talks to Editor Meena Kansal about the company and the remittance business.

MK: William Blair is taking a lot of interest in the GCMT 2007 Conference. What do you hope to achieve in the remittance marketplace?

RM: We work in the remittance marketplace more as an advisor, so we represent companies who are looking either to sell their business or acquire other businesses or raise capital in the industry. It's obviously a consolidating industry and there are interesting growth dynamics; there have been a lot of transactions in the industry. William Blair offers unique domain knowledge and has focused considerable resources towards the money transfers industry. We are focused on the middle market, rather than multibillion dollar types of companies; our market is businesses that are $50-$500 million.

MK: William Blair was involved in the First Data transaction and the Travelex-Coinstar deal. Talk about your experience in the remittance sector.

RM: It was a large transaction for First Data, and for Vigo, it was a consolidation and an opportunity to buy a brand that had very strong local market relationships as opposed to Western Union and MoneyGram that had larger distributor relationships. The Travelex - Coinstar transaction was a different type of deal – more focused on money transfers between the UK and other types of corridors, whereas the Vigo one was more of a US-to-Caribbean and Latin corridors.

MK: What is the future of the money transfers business?

RM: We're seeing a lot of technology advancement in the way that people initiate transactions. We're seeing growth in mobile payments, stored value cards and prepaid technology. In the money transfers sector, it is not a super-technology based transaction so clearly one of the risks for the industry is whether advances in technology will dis-intermediate the agent-customer relationship. The factor that softens that blow is the growth in the overall industry, so there is a lot of pie to carve up in the largest markets.

There are technologies that enable people to do their job better, especially on the regulatory and compliance side. There is a lot of advancement and development that creates opportunity.

MK: How important is compliance to your area?

RM: Compliance in the number one goal in this area, within an M&A transaction. Buyers are exceptionally focused on ensuring that the company they plan to acquire is compliant with all the necessary laws and have procedures and policies in place that can identify non compliant transactions. It's essential. It's an opportunity in that there are existing companies that are compliant and there are fringe players that are less compliant and the latter will have to either pay a lot of money to become compliant or get out of the market. So for the larger players that have got robust systems and procedures in place, I think it's a great opportunity. We've seen a lot of players use that as a competitive advantage over others.