Online payment provider Optimal Payments has struck a deal to acquire Sentinel Topco Limited and its various subsidiaries, including rival payment processor Skrill, from Sentinel Group Holdings.
Under the deal, Optimal subsidiary Netinvest Limited will acquire the entire issued share capital of Skrill in exchange for €720 million ($781 million) and 37,493,053 new ordinary shares, payable at completion.
Sentinel Group will own approximately 7.9% of the enlarged share capital of the new company.
In a statement, Optimal said the deal will be both “transformational and value enhancing” for the company, enabling it to create a “leading payment and digital wallet provider with significant international scale and reach”.
Optimal also stated that the new combined company would be well positioned to capitalise on the expanding payment processing and digital wallet markets, particular within the online gambling sector.
The acquisition is expected to be completed by the third quarter of this year. The news was welcomed by the markets, with Numis issuing a note saying “we believe EBITDA will treble by FY17E” and that the deal bought “major competitor on board (for Optimal Payments), sharply reduces the exposure to Asia (and the “major merchant”) and brings credible VC investors onto the share register. The company is expected to move to Main Market and join the FTSE250 index as soon as possible after completion. Trading in the shares will be suspended ahead of an EGM”.
Joel Leonoff, president and chief executive officer of Optimal Payments, said: “Over the past four years, we have successfully delivered significant growth in revenues and earnings for our shareholders.
“This growth resulted from executing our strategy to generate high levels of organic growth supplemented by accretive acquisitions.
“The acquisition of Skrill will create a global tech champion in the fast growing digital payments space, and we believe represents a transformational leap forward that greatly accelerates our strategic plan.
“The Optimal Payments management team is extremely excited about the future prospects for the company.
“The combined business will be quoted in the UK and will be of sufficient scale for us to seek a main market listing and FTSE250 inclusion as soon as possible following completion of the acquisition.”
Meanwhile, Optimal has also confirmed its full-year financial results for the 12 months ended December 31, 2014.
Results are mainly unchanged from those outlined in an earlier issued trading update.
Revenue for the year amounted to $365 million, up 44% on the previous year, while earnings before interest, tax, depreciation and amortisation jumped 65% year-on-year to $86.1 million.
Profit after tax was also up 83% on the previous year to $57.7 million.
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