23rd Mar 2015 08:13
LONDON (Alliance News) - Optimal Payments PLC Monday said it is to acquire payments company Skrill Ltd from private equity company CVC Capital partners and investment manager Investcorp Technology Partners for an enterprise value of EUR1.1 billion, a deal it will fund with cash, new debt facilities and an underwritten rights issue.
The move came as Optimal reported a USD59.0 million pretax profit in 2014, up from USD32.7 million in the prior year, bolstered by revenue growth in its NETBANX and NETELLER businesses.
The AIM-listed payments company, which also now wants to join the London Stock Exchange's FTSE 250 index, said it will pay EUR720 million in cash and 37.5 million new shares for Skrill, a move that will give Sentinel Group Holdings SA, the company owned by CVC Capital and Investcorp Technology, a stake of about 7.9% in Optimal Payments.
"We are taking advantage of an exceptional opportunity to acquire a business we know very well which, combined with Optimal Payments, will be a leading UK based online payments business with the essential scale necessary to be highly successful. These opportunities are few and far between," Dennis Jones, Optimal's chairman, said in a statement.
"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, additionally, will enable us to deliver enhanced services to existing and prospective merchants and customers in all of our global markets," Jones added.
Optimal Payments said the combined group could benefit from cost savings synergies of USD40 million per annum and wants to achieve that by the end of 2016. It would book USD26 million in costs by that point to "achieve" the cost savings. It also thinks there will be cross-selling opportunities and the ability to consolidate platforms.
Optimal said that Bank of Montreal, Barclays Bank PLC and Deutsche Bank Luxembourg SA are providing credit facilities of EUR500 million to help fund the deal, while it also launched a GBP451 million rights issue. Shareholders will be given the right to buy five new shares priced at 166 pence per share for every three they already own.
According to Optimal, more than 50% of its shareholders have backed the acquisition, including largest shareholder Old Mutual Global Investors. The deal is classed as a reverse takeover under AIM rules.
By Samuel Agini; [email protected]; @samuelagini
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