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PayPal buying international money transfer player Xoom

PayPal is buying Xoom for $25 a share, in an all-cash deal, the companies said Wednesday. Xoom operates as an international money-transfer player.

Following a trading halt, Xoom shares resumed extended hours trading around 6 p.m. ET and spiked as much as 25 percent.

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Models for KDDI Corp. pose with a Motorola XOOM tablet device manufactured by Motorola mobility Inc.
Haruyoshi Yamaguchi | Bloomberg | Getty Images
Models for KDDI Corp. pose with a Motorola XOOM tablet device manufactured by Motorola mobility Inc.

At $25 per share, PayPal would shell out about $975 million in the deal. The price represents a premium of about one-third over Xoom's three-month volume-weighted average.

"Acquiring Xoom allows PayPal to offer a broader range of services to our global customer base, increase customer engagement and enter an important and growing adjacent marketplace," said PayPal President Dan Schulman in a statement.

PayPal, which is currently owned by eBay, will become an independent public company this month.