In a move akin to the two feuding parties realizing that they have been in love all along, Optimal Payments which operates the NETELLER digital e-wallet system have acquired Skrill in a deal announced Tuesday. There is the small matter of approximately $1.2b that make the conciliation happen but those who have watched the companies joust over the past years will have little surprise the two competitors have finally realized that they are stronger as one. Indeed it is likely they have known it all along in some capacity. Optimal reportedly first considered the move, which constitutes a reverse takeover according to Reuters, in 2011 and so the merger (which still requires ratification of shareholders and regulatory boards but seems in little doubt) represents something of a “long game”.
Skrill’s operations have been largely focused in Europe with their e-wallet widely accepted across the continent by gaming and non-gaming enterprises. Indeed, approximately 50% of their transactions are non-gaming related according to reports, and set to grow if they become an accepted resource for eBay marketplace as is anticipated. However, it seems likely that the conjoined companies are mostly likely to reap a sum gain from the regulated US gaming market as that simmering pot of cash shows ever more increasing signs of once again boiling over.
NETTELLER currently handle payment processing for all the notoriously restrictive State governed online gaming operators. Whilst legal currently in just a tiny fraction of US States, the number looks almost certain to increase in future months and years as individual States balance opinions with Budget deficits. If California, for example, decides to regulate, then the combined forces will look to make a consolidated impact. Indeed, as Optimal’s CEO and president Joel Leonoff noted, the company is “…very well positioned” when it comes to online gaming opportunities in the US.
“The acquisition of Skrill will create a global tech champion in the fast growing digital payments space and we believe this represents a transformational leap forward that greatly accelerates our strategic plan,” Leonoff said in a press release following the acquisition.
The stated goal is to offer enough alternate payment options so that merchants can eventually reach a 100 percent conversion rate for players. In doings so, Leonoff believes that Affiliates will have more confidence in the brands and providers they promote.
Optimal shares are currently listed on London’s junior AIM market but the combined company has said it would seek a main market listing and inclusion in the FTSE-250 Midcap Index as soon as possible after completion of the deal.
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