charlie51
24 Mar 2015
Re: Will Optimal Payments Plc Deal To Bu... Interesting. What they don't seem to mention is that Leonoff is near obsessive about running a highly profitable business and that everything he does is aimed to that end. This is in stark contrast to the board at Monitise to whom the word profit (other than for themselves) is not in the corporate lexicon.
IOMINVESTCOM
23 Mar 2015
Re: Will Optimal Payments Plc Deal To Buy Sk... Optimal Payments (LSE: OPAY) has announced a transformational this morning to buy the maker of the Skrill e-wallet, the biggest competitor to its Neteller business. The total value of the deal is £801m and will be funded with cash, new debt facilities and a fully underwritten rights issue for about £451m. This deal will double the size of Optimal almost overnight and allow the company to grab a large chunk of the European online payments market. The Skrill Group operates one of the largest pre-paid online voucher providers in Europe with its paysafecard brand.What’s more, Optimal is buying Skrill at a relatively attractive valuation. Indeed, The Skill Group reported a core profit of $89m or €82m for the year ended September, implying that Optimal is paying 13.4 times historic earnings for the company. The deal is expected to close during the third quarter of 2105 and will immediately boost earnings per share. But will Optimal’s expansion plans make life harder for the company’s peer, Monitise (LSE: MONI)?Different sectorsMonitise and Optimal operate in different sectors of the mobile money economy. Optimal’s existing Neteller business provides a service for the gaming market, while Monitise’s offering targets larger corporate customers, such as banks and telecoms giant Telefonica. So in theory, the two companies shouldn’t come to blows after this deal.However, now that Optimal and Skrill are planning on joining forces, Optimal could start to encroach on Monitise’s turf. Still, Monitise has worked hard to build a solid reputation with some of Europe’s largest banks over the past few years, along with other corporate giants such as IBM. These key customers are unlikely to desert the company any time soon. What’s more, if Optimal really wanted to get into the same area of payments processing as Monitise, Optimal could have acquired Monitise. With a market value of £400m at present, it would have been cheaper for Optimal to acquire Monitise over Skill.The fact that Optimal chose to pay more to acquire Skill, indicates that Optimal’s management is more interested consumer payments processing market, rather than working with big institutions, the path Monitise has taken.For the time being then, Optimal and Monitise’s business models will keep the two from fighting over customers. Although this could quickly change if Optimal uses its new customer base, acquired through Skrill, to apply pressure to Monitise. Looking for growth?All in all, Optimal’s deal to acquire Skill will be a game-changing deal for the company, transforming it into one of Europe’s largest payment processors. And for the time being, this deal should have little effect on Monitise’s growth.If you already own Monitise and you're looking for othe
IOMINVESTCOM
23 Mar 2015
Will Optimal Payments Plc Deal To Buy Skrill Group Hurt Monitise Plc? [link]
KEEPING CALM MIKE
23 Mar 2015
Re: Edison's View Good reading thanks for sharing the link Kemi
kemicalz13
23 Mar 2015
Edison's View Alot to take in for one day!Edison's report sums up the FY results & acquisition quite nicely.[link]
big chef
23 Mar 2015
Re: The market likes it Just sold @ 5.25 - was bobbing up and down between that and 5.50, but whichever way I look at it, that's a pleasing sight, after the nervous last few months.That's a trade as far as I'm concerned and may well put the money back in prior to the rights date, as OPAY still looking good.Need dust to settle though, after a crazy day - could still end up or down a lot from here I guess, in the last hour.Big Chef.
Willow67
23 Mar 2015
Re: The market likes it Wow after missing the previous 525 high and watching the decline Into the 300's with some annoyance I am feeling nicely vindicated at holding today! Not had an opportunity to get my head around the numbers yet....
pendil
23 Mar 2015
The market likes it SP now at 560p, up 33%. I can't recall the share price of the acquiring company reacting so positively to an acquisition.
charlie51
23 Mar 2015
Re: RNSs And here is the Killik view:Optimal Payments acquisition of Skrill - it could be a great deal – the combination will create the second largest payment processor after PayPal. Optimal has announced the c.£846m acquisition of Skrill, Neteller’s main competitor in wallet payments for online gambling. We believe the combination of the two wallets will remove the friction which comes from competition for merchants and consumers and that the combined business will be able to optimise pricing and investment in technology and marketing. The consideration will be funded by a £442m 5 for 3 rights issue at 166p, £100m of equity being rolled by the vendors into Optimal at the 261p theoretical ex-rights price (accounting for a c.8% holding in the company) and net new debt of c.£304m. The greater earnings diversification by geography and customer should drive a rerating (OPAY has historically traded at a discount to peers as a result of its large exposure to Asian “grey” markets via one very large client). In addition, there are initially $40m of cost synergies in the first full year (implying high single digit earnings accretion in year 1) and likely more to follow . For non-holders however, judging the entry point (given it’s a rights issue and debt funded deal) is almost impossible to judge. The TXR price is 261p (it is a 5 for 3 at 166p to raise £442m)…that is fully underwritten but we suspect a number of shareholders won’t be able to take up their rights in full and may therefore need to sell some in the market before the record day of 14th April to take up some. Against this the deal would likely attract US interest…..in part as a way of buying into European earnings (Skrill is 92% European revenues – pro-forma enlarged group would be c.52% exposed to Europe)…in the meantime the collapse in the Euro v the $ means OPAY are paying more like 15.5x EBITDA on a mark to market currency basis rather than the reported (and very attractive) c.13.5x September 2014.
Centre Court
23 Mar 2015
Re: RNSs I wonder why the rights issue had to be discounted so heavily. I suspect the only way to get the institutions on board. It will be interesting to see how the share price will react when trading recommence; I suspect it will pull back substantially.
charlie51
23 Mar 2015
RNSs Wow! Great results and a very interesting acquisition. A main listing now cannot be far off either. It's all getting quite grown up - which may remove some of the fun here in the longer term.
claude reins
18 Mar 2015
Re: Safecharge - Shore view Thanks for that. Doing well.
charlie51
17 Mar 2015
Re: Safecharge - Shore view It would be good and helpful to have included the Shore view: Shore Capital comment on - SAFECHARGE (SCH, House Stock*, Current Price 253p) – Full year results, strong momentum. The payment services specialist has reported strong growth in revenues, profitability, earnings and cash flow for its full year to December 2014, slightly ahead of our previously upgraded forecasts. The company, at its AIM float in March 2014, set itself a number of demanding objectives, both for financial and corporate development. SafeCharge has delivered across a broad front, in our view. Growth continued to accelerate through last year, resulting in three upgrades to our forecasts post float; this momentum is indicated by management to have continued into the current year, through the first quarter period. We believe secular growth rates in the payment services industry remain high, providing a positive backdrop for SafeCharge.FY2015F is set to see the fruits of last year’s corporate activity begin to emerge, SafeCharge has now delivered two acquisitions from the US$125m gross funds raised at IPO; we expect further transactions to follow, leveraging continuing organic investment and growth. Additional products and services are set to follow last year’s success in achieving acquiring status for merchant clients and in becoming an ‘electronic money’ institution. As the cost and timing of the launch of these, with associated acquisitive development, continues to be determined; we conservatively retain our current forecast stance (post recent upgrades) for FY2015F, we believe prospects remain bright.FY Results - Dividend. SafeCharge outperformed our upgraded expectations for FY2014. Revenues at US$76.9m were US$1.4m ahead our expectation (forecast on float was for US$61.2m). EBITDA at US$24.7was US$0.2m ahead (US$18.1m on float) of our expectations. Adj. PBT at US$23.6m was cUS$0.3m ahead of our expectation, with adj. EPS at 14.7c being 0.3c ahead. Net cash also ended the year stronger than our expectation (by cUS$3.0m) at US$146.5m. A FY dividend of 8.16c is proposed, compared to our most recent forecast of 7.00c. On our current FY2015F expectations, SafeCharge trades on a PER of 22.9x and an EV/EBITDA multiple of 14.3x with high organic growth rates continuing, support from the strong balance sheet and ahead of excellent continued upgrade prospects, in our view. SafeCharge also offers a dividend yield of 2.1% on our forecasts for the current year.
charlie51
17 Mar 2015
Safecharge - Shore view I am not trying to push SCH, merely point out the maiden results from a new player and its valuation. Looks a very interesting company, that said the valuation of OPAY looks to be very attractive by comparison.
charlie51
17 Mar 2015
Re: Safecharge It's a competitive world. I would not just want to have my foot in one camp. It is also a large enough and growing market to accommodate a few players. Good news for both SCH and OPAY is that Skrill, who are big, are going through a tough time as I understand it.
