Optimal Payments, a provider of online and mobile payment processing services, has signed an agreement to buy Sentinel Topco Limited and its subsidiaries (Skrill Group) from Sentinel Group Holdings for an enterprise value of nearly 1.1bn ($1.2bn).
Under the terms of the acquisition, Optimal Payments subsidiary Netinvest will buy the entire issued share capital of Skrill in exchange for 720m ($781m) in cash.
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Upon completion of the deal, Sentinel Group Holdings or its shareholders will hold approximately 7.9% of the Enlarged Share Capital of the Enlarged Group.
The transaction, which is scheduled to close in the third quarter of 2015, will add to earnings per share in the first fiscal year of ownership.
The value of the equity consideration for Skrill is 135M ($146m), based on the theoretical ex-rights price of the Rights Issue.
Additionally, Optimal Payments is planning to raise approximately £451m via a Rights Issue of 5 new ordinary shares at 166 pence per share for every 3 existing ordinary shares.
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By GlobalDataThe deal is expected to generate on-going cost saving synergies of $40m per year by the end of the fiscal year ending 31 December 2016.
The acquisition intends to expand Optimal Payments’ customer base, product offering including its online payment and digital wallet services, geographic and sector presence in addition to expanding its profit margin and growth opportunities.
Optimal Payments chairman Dennis Jones said: "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."
Optimal Payments President and CEO Joel Leonoff said: "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 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."
