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Optimal Payments To Buy Skrill Group For Enterprise Value Of $1.2 Bln

Optimal Payments Plc (OPAY.L), a global provider of online and mobile payment processing services, said it reached an agreement to acquire Sentinel Topco Limited and its subsidiaries or Skrill Group from Sentinel Group Holdings S.A., ultimately owned by funds managed and advised by subsidiaries of CVC Capital Partners SICAV-FIS S.A., Investcorp Technology Partners, and other shareholders, for an enterprise value of approximately 1.1 billion euros or $1.2 billion.

A subsidiary of Optimal Payments, Netinvest Limited, will acquire the entire issued share capital of Skrill in exchange for 720 million euros or $781 million cash and 37.49 million New Ordinary Shares, payable at Completion. Following Completion, Sentinel Group Holdings S.A. or its shareholders will own approximately 7.9% of the Enlarged Share Capital of the Enlarged Group.

The value of the equity consideration for Skrill is 135 million euros or $146 million, based on the theoretical ex-rights price of the Rights Issue, which together with the cash consideration and the net debt of Skrill as at 31 December 2014 of 256 million euros or $277 million gives an enterprise valuation of Skrill of approximately 1.1 billion euros or $1.2 billion.

The Skrill Group is one of Europe's leading digital payments businesses providing digital wallet solutions and online payment processing capabilities.

The acquisition is expected to be earnings per share accretive from the first full fiscal year following Completion.

The Completion of the Acquisition is expected in the third quarter of 2015.

On-going cost saving synergies of $40 million per annum are targeted to be achieved by the end of the fiscal year ending 31 December 2016. The synergy estimate has been reviewed and endorsed by one of the "Big Four" accounting firms. One-off costs to achieve the cost savings are expected to be approximately $26 million by the end of the fiscal year ending 31 December 2016.

In addition, Optimal Payments said it is proposing to raise approximately 451 million poundsthrough a Rights Issue of 5 New Ordinary Shares at 166 pence per share for every 3 Existing Ordinary Shares. The Rights Issue has been fully underwritten by Canaccord Genuity, Deutsche Bank and BMO Capital Markets.

The Offer Price for the Rights Issue represents a 60 per cent discount to the Closing Price of 419 pence per Existing Ordinary Share on 20 March 2015.

The Acquisition and the Rights Issue are conditional upon the approval of Shareholders at the General Meeting. The General Meeting is expected to be held on 16 April 2015.

It is expected that application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is expected that Rights Issue Admission will become effective and that dealings in the New Ordinary Shares, nil paid, will commence on AIM at 8.00 a.m. on 17 April 2015.

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