OPAY to Takeover Online Gambling Payments Rival Skrill for €1.1 Billion
Optimal Payments (OPAY), the parent company of leading online gambling payment processor Neteller, has closed a deal to takeover payment processing rival Skrill, by acquiring Sentinel Topco Limited from Sentinel Group Holdings S.A. for €1.1 billion (£808.1 million). The completion of the acquisition deal between the two will financially benefit Sentinel Group’s ultimate owners, the fund managed subsidiaries and shareholders of CVC Capital Partners and Investcorp Technology Partners.
A Transformational Acquisition Bid
The acquisition transaction is touted as transformational by the Directors of Optimal Payments as it will result to the merger of OPAY’s and Skrill’s technology, expertise and resources. OPAY envisions creating a leading payment processing services and e-wallet provider, which it currently calls as the “Enlarged Group.” The “Enlarged Group” will have significant international range and reach in optimal locations that will enable it to capitalise and build on the emerging e-wallet and payment processing markets, particularly within the rapidly growing online gambling sector.
The complementary digital wallet businesses of OPAY’s NETELLER, and Sentinel’s Skrill, is regarded as a compelling strategic fit in making the “Enlarged Group,” a leading international provider of digital wallet solutions and payment processing services. Moreover, the “Enlarged Group’s” existing principal membership with Visa and MasterCard Europe, and the addition of Skrill’s Paysafecard, will give the enlarged company a full suite of end-to-end payment solution to offer existing and potential European customers, merchant partners, and vendors.
Key Aspects of the Acquisition Agreement
The agreement places the acquisition value of Skrill at 9.3x the Earnings before Interests, Tax, Depreciation, and Amortization (EBITDA) in a 12-month period from September 2014, adjusted for the net present worth of the projected cost synergies. The entire enterprise valuation of Skrill approximates to €1.1 billion (£808.1 million). The mode of acquisition entails a reverse takeover in accordance with the Rules for Companies of the Alternative Investment Market (AIM) and subject to the satisfaction of agreement conditions and related regulatory approvals.
Netinvest Limited, a subsidiary of Optimal Payments will purchase Skrill’s issued capital shares by paying €720 million (£530.3 million) in cash, and by issuing new common shares totaling 37,493,053 upon completion of the acquisition transaction. After which, the Sentinel Group Holdings S.A. will own in behalf of its shareholders around 7.9 percent of the “Enlarged Group’s” share capital. The reverse takeover acquisition agreement includes a condition that the Sentinel Group Holdings S.A. will hold the Optimal Payments shares for at least 180 days after the Completion Admission.
The Chairman of Optimal Payments, Dennis Jones, commented that his company is taking advantage of an excellent and rare opportunity to get hold of a business that they know very well. Once Skrill combines with Optimal Payments, the company will become a leading UK based online payments enterprise that possesses the essential scale needed in order to be highly successful. He added that the Board of Optimal Payments believe that the transformational acquisition transaction will add gradual growth to the earnings per share value that will benefit OPAY shareholders, starting from the first full fiscal 12-month period of owning Skrill.
He explained that the strategy will not only diversify OPAY’s client base, but will also enable them to furnish improved services to both existing and potential customers and merchant partners (including online gambling operators), across OPAY’s global markets.
