UK-listed online payment processor Optimal Payments has struck a €1.1b deal to acquire rival Skrill.
Optimal announced on Monday that it had entered into an agreement to perform a reverse takeover of Sentinel Topco Ltd., which counts Skrill among its subsidiaries. Sentinel is currently owned by funds managed and advised by CVC Capital Partners, which acquired a majority stake in Skrill for €600m in August 2013. The parties expect to finalize the deal by Q3 2015.
Skrill, which began life as Moneybookers in 2001, is a popular payment processor in online gambling circles, and also controls the Ukash and Paysafecard businesses. Optimal has been approved in all three US states currently offering some form of intrastate online gambling and has also boosted its presence in Canada’s regulated provincial online markets.
Optimal justified its Skrill acquisition as a way to diversify its profile and ensure it isn’t overly reliant on online gambling. Optimal chairman Dennis Jones said the Skrill deal was one of those opportunities that are “few and far between” and would likely be earnings accretive “from the first full fiscal year of ownership.”
Optimal reported a $59m pretax profit in 2014, up 80% over 2013. Optimal said Skrill generated revenue of €216m in 2013 and €249m through the first nine months of 2014.
Optimal said it would likely continue in the “ongoing consolidation” of the online payments industry that both Optimal and Skrill have been embracing. Last July, Optimal paid $225m to acquire two California-based processors, Meritus and global Merchant Advisors. Skrill acquired Ukash parent firm Smart Voucher Ltd. in November 2014.
Optimal shares rose nearly 25% on Monday to close at 522p. The AIM-listed Optimal said it hopes the deal will pave the way for its shift to the London Main Market and (hopefully) a spot in the FTSE 250 index.