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Optimal Payments Acquires Skrill Holdings for $1.2 BillionPublished March 25, 2015 by Lee R
The deal relies on financial service providers to complete the transaction integrating financial technologies of Skrill parent company Sentinel and Optimal's payment services.
Optimal Payments has agreed to a digital wallet provision service with Sentinel Topco Limited.
Terms of Agreement
The deal to purchase the Sentinel, which owns digital wallet group Skrill is worth a reported $1.2 billion, and will take place through CVC Capital Partners.
Optimal is processing the payment through its subsidiary Netinvest Limited, and is set to obtain the entire issued share capital of Skrill in exchange for $781 million cash as well as $37.49 million worth of Optimal Shares. Following Completion, Sentinel Group Holdings S.A. and shareholders will own approximately 7.9% of the Enlarged Share Capital of the Enlarged Group.
Skrill the Jewel
Ownership of Skrill, one of Europe's leading digital payment businesses, seems to be the key holding being exchanged. Skrill is an innovative market leader for digital wallet solutions to both customer and business needs in the European region of emerging online gambling markets.
This is at heart a cost-cutting measure for Optimal, as the acquisition of the Skrill technology will save Optimal an estimated $40 million a year in payment processing costs in the high speed payment, high volume environment that online gambling represents.
The reverse takeover by Optimal of former rival Skrill is expected to vault Optimal Payments' new combined online payments business into the FTSE 250.
Optimal has broadened exposure to the online gaming sector to meet the growth demands of the rapid expansion of that sector.
Digital Wallet Protecting E-Commerce and Online Gambling
The deal also diversifies the ability of Optimal to meet the needs of the wider e-commerce world in general, a reminder that online gambling expansion takes place not just because of gaming popularity, but because of adaptation of all business processes to the expanding e-commerce environment.
Digital wallets are increasing important for online gambling in general because players commonly play across multiple sites in regulated and unregulated markets. Players are not aware of the extent of regulation in each online environment that they play in, so digital wallets are effective means by which to protect those player funds as third party holders.