Optimal Payments to acquire rival Skrill for 1.1bn
Optimal CEO Joel Leonoff says the acquisition is a "transformational leap forwards" for the owner of the NETELLER brand
NETELLER owner Optimal Payments is set to acquire rival firm Skrill for approximately 1.1bn in a reverse takeover deal that will transform the online gambling payments sector.
London-based Optimal will acquire the holding companies behind Skrill from its current owners CVC Capital partners for 720m in cash and the remainder in shares, amounting to 7.9% of Optimal post-acquisition, on completion of the deal.
The acquisition represents further consolidation for the payments sector, with Skrill having acquired prepaid voucher provider Ukash in November last year and prior to that buying paysafecard in 2013 for 140m.
“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,” Optimal CEO Joel Leonoff said.
Optimal Payments chairman Dennis Jones said the firm was “taking advantage of an exceptional opportunity” to achieve “the essential scale necessary to be highly successful”.
“The board believes this transformational transaction will be earnings accretive for shareholders from the first full fiscal year of ownership, will further diversify our client base and will enable us to deliver enhanced services to existing and prospective merchants and customers in all of our global markets,” Jones said.
The deal is also the second major acquisition drive by Optimal Payments in less than a year, after the company acquired two US-facing payment processors – Meritus Payment Solutions and Global Merchant Advisors – for a combined $225m in July 2014.
Optimal said it will pay 9.3x Skrill’s EBITDA for the 12 months to September 2014, and that the acquisition would be financed through a combination of available cash, new debt facilities and a fully underwritten rights issue.
The Bank of Montreal, Barclays Bank and Deutsche Bank Luxembourg have committed to provide credit facilities of 500m, while Optimal will raise a further £451m (620m) through a rights issue of five new ordinary shares at 166p per share for every three existing ordinary shares.
The rights issue has been fully underwritten by Canaccord Genuity, Deutsche Bank and BMO Capital Markets.
CVC, which last week completed its acquisition of Sky Betting & Gaming, acquired a majority stake in Skrill back in 2013 in a deal worth 600m.