PROPOSED ACQUISITION BY OPTIMAL PAYMENTS OF SKRILL TO CREATE A LEADING GLOBAL PLAYER IN ONLINE PAYMENT AND DIGITAL WALLET SERVICES

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1 THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND OR SOUTH AFRICA (THE "EXCLUDED TERRITORIES") AND SHOULD NOT BE DISTRIBUTED IN, FORWARDED TO OR TRANSMITTED INTO THOSE COUNTRIES OR INTO ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OF LOCAL SECURITIES LAWS OR REGULATIONS. THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND DOES NOT CONSTITUTE A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT. NOTHING IN THIS ANNOUNCEMENT SHALL CONSTITUTE OR FORM PART OF, AND SHOULD NOT BE CONSTRUED AS, AN OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY OR SUBSCRIBE FOR ANY SECURITIES REFERRED TO HEREIN NOR SHOULD IT FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY CONTRACT OR COMMITMENT WHATSOEVER. INVESTORS SHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY SECURITIES REFERRED TO IN THIS ANNOUNCEMENT EXCEPT ON THE BASIS OF THE INFORMATION IN THE PROSPECTUS TO BE PUBLISHED BY OPTIMAL PAYMENTS PLC IN CONNECTION WITH THE RIGHTS ISSUE. COPIES OF THE PROSPECTUS WILL, FOLLOWING PUBLICATION, BE AVAILABLE FROM THE REGISTERED OFFICE OF OPTIMAL PAYMENTS PLC. PROPOSED ACQUISITION BY OPTIMAL PAYMENTS OF SKRILL TO CREATE A LEADING GLOBAL PLAYER IN ONLINE PAYMENT AND DIGITAL WALLET SERVICES FULLY UNDERWRITTEN RIGHTS ISSUE TO RAISE GROSS PROCEEDS OF APPROXIMATELY 451 MILLION A transformational transaction that diversifies Optimal Payments customer base, product offering, geographic exposure and sector presence Profit margin expansion and improved expected growth opportunities Value uplift opportunity via significant cost-saving synergies EPS accretive in first full fiscal year of ownership (1) Intention to seek Main Market listing and FTSE250 Index inclusion as soon as possible after Completion LONDON (March 23, 2015) -- Optimal Payments Plc (LSE AIM: OPAY, Optimal Payments or the Optimal Payments Group ), a global provider of online and mobile payment processing services, has entered into an agreement to acquire Sentinel Topco Limited and its subsidiaries ( Skrill 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 ($1.2 billion) (the Acquisition ). The Skrill Group is one of Europe's leading digital payments businesses providing digital wallet solutions and online payment processing capabilities and is one of the largest prepaid online voucher providers in Europe with its paysafecard brand. The Directors of Optimal Payments believe that the Acquisition will be transformational and value enhancing for Optimal Payments and will create a leading payment and digital wallet provider with Optimal Payments Plc 1

2 significant international scale and reach that is well positioned to capitalise on the substantial and growing payment processing and digital wallet markets, particularly within the rapidly expanding online gambling sector. The Directors believe that there is a clear and compelling strategic and financial rationale for a combination of Optimal Payments and Skrill (forming the Enlarged Group ): 1. The Enlarged Group will have significantly enhanced scale to create market leadership in the stored value and payments processing sectors: o 100+ payment types in 22+ languages and 41 currencies offered by the Enlarged Group o A broadened sector exposure to digital media and e-commerce segments as well as enhanced presence in online gambling 2. Increased customer and geographic diversification: o Increased merchant diversification and establishing a well-rounded and broad customer base o Compelling complementarity in Optimal Payments and Skrill s geographic areas of operation and revenue generation o Well positioned to capitalise on expected growth in the North American regulated online gambling market 3. Highly complementary businesses with compelling strategic fit: o A leading global player in the digital wallet category with the NETELLER and Skrill digital wallet o Well positioned as a leading straight-through processing payment gateway services provider in the attractive e-commerce sector o The Enlarged Group s Principal Membership with Visa Europe and MasterCard Europe provides a complete end to end payment solution for partners and merchants in Europe o Strengthened pre-paid online payment solutions offering with the addition of paysafecard 4. Strong financial rationale and substantial potential synergies: o Combined revenue of $697 million, EBITDA of $175 million (1)(2) o Acquisition is expected to be EPS accretive from the first full fiscal year following Completion (1) o On-going cost saving synergies of $40 million per annum targeted to be achieved by the end of the fiscal year ending 31 December 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 o The Directors of Optimal Payments believe there will be additional value upside potential from revenue cross-selling opportunities and platform consolidation o The Directors of Optimal Payments believe there will be a further value uplift opportunity from potential re-rating due to the enhanced scale, growth, margin profile and market position of the Enlarged Group Optimal Payments Plc 2

3 5. Experienced and augmented management team: o Strong leadership team of Optimal Payments with collectively over 140 years of experience in international payment processing o Significant transaction integration experience (most recently with Meritus / GMA and previously with the integration of Optimal and Neovia) o Intention to augment Optimal Payments senior management with Skrill executives The Enlarged Group intends to seek a Main Market listing and FTSE250 Index inclusion as soon as possible following Completion. The key terms of the Acquisition are: A subsidiary of Optimal Payments, Netinvest Limited, will acquire the entire issued share capital of Skrill in exchange for 720 million ($781 million) cash and 37,493,053 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 ($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 ($277 million) (3) gives an enterprise valuation of Skrill of approximately 1.1 billion ($1.2 billion). The Acquisition values Skrill at a multiple of 9.3x EBITDA for the twelve months to September 2014, adjusted for the net present value of the targeted cost synergies. (4) Based on the Optimal Payments Closing Price of 419 pence per Existing Ordinary Share on 20 March 2015, Optimal Payments is valued at a multiple of 14.1x EBITDA for the twelve months to December (5) The Acquisition values Skrill at a multiple of 13.5x EBITDA for the twelve months to September 2014 excluding the impact of the targeted cost synergies. The Acquisition constitutes a reverse takeover under the AIM Rules for Companies and is subject to the satisfaction of a number of conditions including, inter alia, both Optimal Payments shareholder approval and regulatory approvals having been obtained. Sentinel Group Holdings S.A. and its shareholders have committed to maintain their shareholding in Optimal Payments for at least 180 days following Completion Admission. Financing of the Acquisition The cash consideration will be financed through a combination of available cash, new debt facilities and a fully underwritten Rights Issue. Bank of Montreal, Barclays Bank PLC and Deutsche Bank Luxembourg S.A. have committed to provide financing for the Acquisition via credit facilities of 500 million. Following the Acquisition, Optimal Payments is expected to have pro-forma net leverage of approximately 3.1x (2). It is expected that the strong operating cash flow profile of the combined business will enable the Enlarged Group to de-lever rapidly in the medium term. Optimal Payments is proposing to raise approximately 451 million (6) through 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. Optimal Payments Plc 3

4 The Offer Price for the Rights Issue represents: o o o a 34 per cent. discount to the theoretical ex-rights price of an Existing Ordinary Share, when calculated by reference to the volume weighted average price of approximately 398 pence per Existing Ordinary Share during the 5 day period between 16 March 2015 and 20 March 2015 (being the last practicable Business Day before the announcement of the Rights Issue); a 36 per cent. discount to the theoretical ex-rights price of an Existing Ordinary Share, when calculated by reference to the Closing Price of 419 pence per Existing Ordinary Share on 20 March 2015; and a 60 per cent. discount to the Closing Price of 419 pence per Existing Ordinary Share on 20 March Optimal Payments has consulted with its largest shareholders, which in aggregate own over 50% of the Existing Ordinary Shares, and has received very significant support for the Acquisition. Optimal Payments largest shareholder, Old Mutual Global Investors, has signed an irrevocable undertaking to vote in favour of the Acquisition in respect of 18,422,092 shares representing 11.3% of the Existing Ordinary Shares. Thornburg Investment Management has also signed an irrevocable undertaking to vote in favour of the Acquisition in respect of 8,233,781 shares representing 5.0% of the Existing Ordinary Shares. In aggregate, irrevocable undertakings from institutional shareholders to vote in favour of the Acquisition have therefore been received in respect of 26,655,873 Existing Ordinary Shares, representing 16.3% of total Existing Ordinary Shares. Furthermore, each of the Directors who holds Ordinary Shares (which in aggregate represent 2.55% of the Existing Ordinary Shares) is fully supportive of the Acquisition and the Rights Issue. Each of the Directors who holds Ordinary Shares either intends, to the extent that he is able, to take up in full his rights to subscribe for New Ordinary Shares under the Rights Issue or to sell a sufficient number of his Nil Paid Rights during the Nil Paid Rights trading period to meet the costs of taking up the balance of his entitlements to New Ordinary Shares. Temporary suspension of trading Pursuant to the AIM Rules for Companies, Optimal Payments will request a suspension of trading in Optimal Payments' Ordinary Shares until Optimal Payments has published and made available an Admission Document. Optimal Payments intends to publish and make available a Prospectus (which will incorporate an Admission Document, a shareholder circular and notice of meeting convening the General Meeting) following formal approval of the Prospectus by the UKLA. A further announcement will be made once the Prospectus has been so published and made available. Following this, Optimal Payments intends to dispatch the Prospectus as soon as practicable. Shareholder meeting and next steps 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 Optimal Payments Plc 4

5 The New Ordinary Shares will, when issued and fully paid, rank equally in all respects with the Existing Ordinary Shares, including the right to receive all dividends or other distributions made, paid or declared, if any, by reference to a record date after the date of their issue. Subject to Shareholder approval, 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 Completion of the Acquisition is expected in the third quarter of Dennis Jones, Chairman of Optimal Payments, said: We are taking advantage of an exceptional opportunity to acquire a business we know very well which, combined with Optimal Payments, will be a leading UK based online payments business with the essential scale necessary to be highly successful. These opportunities are few and far between. 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. (1) Joel Leonoff, President and Chief Executive Officer of Optimal Payments, said: Over the past four years, we have successfully delivered significant growth in revenues and earnings for our shareholders. This growth resulted from executing our strategy to generate high levels of organic growth supplemented by accretive acquisitions. 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 Optimal Payments Management team is extremely excited about the future prospects for the Company. 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. Analyst meeting and further information Optimal Payments will hold a conference call for analysts and investors at 9:00 a.m. (UK) today. The dial-in number is and the password is Optimal Payments (this must be quoted to the Operator for participants to gain access to the conference call); an audiocast facility is available at: The presentation slides and audiocast of the presentation will be available as a replay on the Optimal Payments Group s website at: The replay dial in details are from the United Kingdom, from all other locations and the replay pin number is: followed by #. For further information contact: Optimal Payments Plc: Tel: +44 (0) Jessica Stalley, Head of Investor Relations Optimal Payments Plc 5

6 Lazard (Financial Adviser): Tel: +44 (0) Cyrus Kapadia Aamir Khan Olivier Christnacht Canaccord Genuity (Nominated Adviser, Debt Adviser, Broker and Joint Bookrunner): Tel: +44 (0) Simon Bridges Piers Coombs (ECM) Andrew Lynn (Debt) Cameron Duncan Deutsche Bank (Joint Bookrunner): Tel: +44 (0) Lorcan O Shea Yishai Fransis Rahul Singla BMO Capital Markets Limited (Co-Lead Manager): Tel: +44 (0) Jeffrey Couch Neil Haycock Tavistock (Financial PR): Tel: +44 (0) Simon Hudson Simon Fluendy Andrew Dunn Notes: (1) No statement in this announcement is intended as a profit forecast or estimate for any period and no statement in this announcement should be interpreted to mean that earnings for Optimal Payments or Skrill, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings (2) Figures represent year to 31 December 2014 revenue and EBITDA for Optimal Payments, and the twelve months to 30 September 2014 for Skrill. The combined financials are not a projection of how the Enlarged Group will trade (3) Includes 48 million ( 37 million) for the Ukash transaction which will be settled net of any free cash in Ukash at completion (anticipated in the first half of 2015). The Ukash free cash position as at 31 December 2014 was 11 million and this has been included in the presentation of Sparrow net debt (4) The multiple is calculated based on an enterprise value for Skrill of $1.2 billion less the NPV of the targeted operating cost synergies after integration costs of approximately $375 million; and Skrill EBITDA for the twelve months to September 2014 of $89 million (5) The multiple is calculated based on an enterprise value for Optimal Payments of $1.2 billion, based on a share price of 419 pence, fully diluted share capital of million and net debt as at 31 December 2014 of $83 million; and Optimal Payments EBITDA for the twelve months to December 2014 of $86 million Optimal Payments Plc 6

7 (6) As the Company will receive the proceeds of the Rights Issue in Pounds Sterling in advance of Completion and the Company's subsidiary, Netinvest Limited, has agreed to pay the cash consideration for Skrill in Euro, the Company has agreed indicative terms for hedging contracts to manage the foreign exchange exposure that arises between signing and completion. Based on the market rate on 20 March 2015, the Company expects that the Pounds Sterling to Euro exchange rate arising from those hedging contracts will be in the region of 1.350, depending on the date of Completion (7) Unless otherwise stated, the exchange rates used for the currency translations above to convert between: (a) euro and US dollars are 1.00:US$ and US$1.00: ; and (b) pounds sterling and euro are 1.00: and 1.00: Optimal Payments Plc 7

8 IMPORTANT INFORMATION The defined terms set out in the Appendix apply to this announcement. Unless otherwise stated, references to time contained in this announcement are to UK time. This announcement is an advertisement and does not constitute a prospectus. Nothing in this announcement should be interpreted as a term or condition of or form a part of, and should not be construed as, any offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities or the solicitation of an offer to buy or subscribe for any securities of the Company, nor should it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. Any decision to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities in the Company must be made only on the basis of the information contained in the Prospectus. This announcement, the Prospectus, the Provisional Allotment Letter and any materials distributed in connection with this announcement or the Prospectus are, subject to certain exceptions, not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of or located in any Excluded Territory or any other locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction and, therefore, persons into whose possession this announcement and/or the Prospectus and/or the Provisional Allotment Letter comes should inform themselves about and observe any such restrictions. Any failure to comply with any such restrictions may constitute a violation of the securities laws of such jurisdiction. A copy of the Prospectus when published will be available from the registered office of the Company and on the Company's website at provided that the Prospectus will not, subject to certain exceptions, be available (whether through the website or otherwise) to Shareholders in the United States or other Excluded Territories. Except in accordance with applicable law, the securities referred to herein may not be offered or sold in Australia, Canada, Japan, New Zealand or South Africa or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada, Japan, New Zealand or South Africa. There will be no public offer of the Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares or the Provisional Allotment Letters in Australia, Canada, Japan, New Zealand or South Africa. In particular, the information contained in this announcement is not for release, publication or distribution, in whole or in part, directly or indirectly, to persons in the United States, Canada, Australia, New Zealand or Japan or any other jurisdiction where it would be unlawful and should not be distributed, forwarded to or transmitted in or into any jurisdiction where to do so might constitute a violation of local securities laws or regulations. This announcement does not constitute or form part of an offer of securities for sale, or a solicitation of an offer to buy securities, in the United States or in any other Excluded Territory or jurisdiction where such offer or solicitation would not be permitted. The securities described in this announcement, when and if offered, will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or with any regulatory authority or under the applicable securities laws of any state or other jurisdiction of the United States, or the relevant laws of any state, province or territory of any other Excluded Territory and may not be offered, sold, pledged, or otherwise transferred directly or indirectly, in or into the United States (as defined in Regulation S under the Securities Act), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state or local securities law. This announcement does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire, nor shall there be any sale of, the Nil Paid Rights, the Optimal Payments Plc 8

9 Fully Paid Rights, the New Ordinary Shares or the Provisional Allotment Letters in any jurisdiction in which such offer or solicitation is unlawful. This announcement is not a prospectus or other offering document. There will be no public offering of securities in the United States. The Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares and the Provisional Allotment Letters have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any other US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of the Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares and the Provisional Allotment Letters or the accuracy or adequacy of the Prospectus. Any representation to the contrary is a criminal offence in the United States. This announcement has been issued by and is the sole responsibility of the Company. Each of Lazard & Co., Limited ("Lazard"), Canaccord Genuity Limited ("Canaccord") and BMO Capital Markets Limited ("BMO Capital Markets"), which are authorised and regulated in the United Kingdom by the Financial Conduct Authority ("FCA") and Deutsche Bank AG, London branch ("Deutsche Bank"), which is authorised under German Banking law (competent authority BaFin Federal Supervisory Authority) and subject to limited regulation by the FCA and the Prudential Regulation Authority ("PRA") in the UK, are acting for the Company only and no one else in connection with the Rights Issue and Rights Issue Admission and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Rights Issue or Rights Issue Admission and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Rights Issue or Rights Issue Admission or any matters referred to in this announcement. Lazard and Canaccord are acting exclusively for the Company and no-one else in connection with the Acquisition and Completion Admission and will not regard any other person (whether or not a recipient of this document) as a client in relation to the Acquisition or Completion Admission and will not be responsible to anyone other than the Company for providing the protections afforded to respective clients of Lazard or Canaccord, respectively, nor for giving advice in relation to the Acquisition or Completion Admission. Apart from the responsibilities and liabilities, if any, which may be imposed on Lazard, Canaccord, Deutsche Bank and BMO Capital Markets by FSMA, Lazard, Canaccord, Deutsche Bank and BMO Capital Markets accept no responsibility whatsoever for the contents of this announcement, including its accuracy, completeness or verification of for any other statement made or purported to be made by it, or on its behalf, in connection with the Company, the Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares, the Provisional Allotment Letters, the Acquisition, the Rights Issue, Rights Issue Admission or Completion Admission. To the fullest extent permissible Lazard, Canaccord, Deutsche Bank and BMO Capital Markets accordingly disclaim all and any liability whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have in respect of this announcement or any such statement. This announcement does not constitute a recommendation concerning the Rights Issue. The price and value of securities can go down as well as up. Past performance is not a guide to future performance. The contents of this announcement are not to be construed as legal, business, financial or tax advice. Each Shareholder or prospective investor should consult his, her or its own legal adviser, business adviser, financial adviser or tax adviser for legal, financial, business or tax advice. Certain statements made in this announcement constitute forward-looking statements. Forwardlooking statements can be identified by the use of words such as may, will, should, predict, assurance, aim, hope, risk, expect, intend, estimate, anticipate, believe, plan, Optimal Payments Plc 9

10 seek, continue or other similar expressions that are predictive or indicative of future events. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Optimal Payments Group's or the Enlarged Group's expectations, intentions and beliefs concerning, amongst other things, the Optimal Payments Group's or the Enlarged Group's results of operations, financial position, growth strategy, prospects, dividend policy and the industries in which the Optimal Payments Group or the Enlarged Group operate, are forward-looking statements. By their nature, such forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are outside the control of the Optimal Payments Group, or the Enlarged Group and its Directors, which may cause the actual results, performance, achievements, cash flows, dividends of the Optimal Payments Group, or the Enlarged Group or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. As such, forward-looking statements are no guarantee of future performance. Such forward-looking statements are based on numerous assumptions regarding the Optimal Payments Group's and the Enlarged Group's present and future business strategies and the environment in which the Optimal Payments Group and the Enlarged Group will operate in the future. Among the important factors that could cause the Optimal Payments Group's or the Enlarged Group's actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others, economic conditions in the relevant markets of the world, market position of the Optimal Payments Group or the Enlarged Group earnings, financial position, cash flows, return on capital and operating margins, political uncertainty, the actions of competitors, activities by governmental authorities such as changes in taxation or regulation, changing business or other market conditions and general economic conditions and such other risk factors identified in the "Risk Factors" section of the Prospectus. Forward-looking statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on forward-looking statements. These forward-looking statements speak only as of the date of this announcement and are not intended to give assurance as to future results. Neither the content of the Company s website (or any other website) nor any website accessible by hyperlinks on the Company s website (or any other website) is incorporated in, or forms part of, this announcement. Optimal Payments Plc 10

11 THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND OR SOUTH AFRICA (THE "EXCLUDED TERRITORIES") AND SHOULD NOT BE DISTRIBUTED IN, FORWARDED TO OR TRANSMITTED INTO THOSE COUNTRIES OR INTO ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OF LOCAL SECURITIES LAWS OR REGULATIONS. THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND DOES NOT CONSTITUTE A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT. NOTHING IN THIS ANNOUNCEMENT SHALL CONSTITUTE OR FORM PART OF, AND SHOULD NOT BE CONSTRUED AS, AN OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY OR SUBSCRIBE FOR ANY SECURITIES REFERRED TO HEREIN NOR SHOULD IT FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY CONTRACT OR COMMITMENT WHATSOEVER. INVESTORS SHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY SECURITIES REFERRED TO IN THIS ANNOUNCEMENT EXCEPT ON THE BASIS OF THE INFORMATION IN THE PROSPECTUS TO BE PUBLISHED BY OPTIMAL PAYMENTS PLC IN CONNECTION WITH THE RIGHTS ISSUE. COPIES OF THE PROSPECTUS WILL, FOLLOWING PUBLICATION, BE AVAILABLE FROM THE REGISTERED OFFICE OF OPTIMAL PAYMENTS PLC. Proposed Acquisition of Sentinel Topco Limited and Proposed 5 for 3 Rights Issue at 166 pence per New Ordinary Share 1. INTRODUCTION Optimal Payments today announces that it and its subsidiary, Netinvest Limited, have entered into a conditional agreement with Sentinel Group Holdings S.A. to acquire Sentinel Topco Limited, ultimately owned by CVC Funds, Investcorp Technology Partners and other shareholders (the Acquisition Agreement ). Completion is subject to the satisfaction of a number of conditions, including, amongst other things, applicable regulatory approvals having been obtained and the Resolutions being passed at the General Meeting. The Company also announces a Rights Issue which is expected to raise gross proceeds of approximately 451 million. The Rights Issue is expected to commence following the Resolutions being passed at the General Meeting. The Rights Issue is being made on the basis of 5 New Ordinary Shares at 166 pence per share for each 3 Existing Ordinary Shares. The Offer Price represents: a 34 per cent. discount to the theoretical ex-rights price of an Existing Ordinary Share, when calculated by reference to the volume weighted average price of 398 pence per Existing Ordinary Share during the 5 day period between 16 March 2015 and 20 March 2015 (being the last practicable Business Day before the announcement of the Rights Issue); Optimal Payments Plc 11

12 a 36 per cent. discount to the theoretical ex-rights price of an Existing Ordinary Share, when calculated by reference to the Closing Price of 419 pence per Existing Ordinary Share on 20 March 2015; and a 60 per cent. discount to the Closing Price of 419 pence per Existing Ordinary Share on 20 March The Rights Issue has been fully underwritten by Canaccord, Deutsche Bank and BMO Capital Markets on, and subject to, the terms of the Underwriting Agreement. The principal terms of the Underwriting Agreement are summarised in the Prospectus. The Rights Issue is conditional upon, amongst other things, Rights Issue Admission becoming effective and the Underwriting Agreement becoming unconditional in all aspects and not having been terminated in accordance with its terms. The net proceeds of the Rights Issue, together with existing cash and additional debt made available to the Optimal Payments Group under the New Bank Facilities, will be used to satisfy the cash consideration of 720 million payable under the terms of the Acquisition. The purpose of this document is to explain the background to, and provide you with information on, the Acquisition and the Rights Issue. The Acquisition, if completed, would be of sufficient size to constitute a reverse takeover under the AIM Rules for Companies, and therefore is subject to the approval of Shareholders at the General Meeting. Further details of the General Meeting are set out in paragraph 18 of this document. Further details of the terms and conditions of the Acquisition are set out in paragraph 8 of this document. This document also explains why the Directors believe the Acquisition and the Rights Issue to be in the best interests of the Shareholders taken as a whole. The Board recommends that you vote in favour of the Resolutions. 2. BACKGROUND TO AND REASONS FOR THE ACQUISITION The Skrill Group is a privately held global provider of digital payment and electronic money solutions, founded and headquartered in London, UK, with key offices in Vienna, New York and Sofia. The Skrill Group is one of Europe's leading digital payments providers providing digital wallet solutions and online payment processing capabilities and is one of the largest pre-paid online voucher providers in Europe with its paysafecard brand. The Skrill Operating Group's consolidated revenues for the financial year ended 31 December 2013 were million ($286.4 million) and adjusted EBITDA was 57.8 million ($76.8 million) for the same period. The Directors consider that the businesses of the Optimal Payments Group and the Skrill Group share a number of key attributes: both the Optimal Payments Group and the Skrill Group are established providers of payment processing and digital wallet solutions to merchants and customers operating at a global scale with a presence in multiple international markets; Optimal Payments Plc 12

13 both the Optimal Payments Group and the Skrill Operating Group are characterised by high underlying gross profit margins (Optimal Payments 52 per cent., Skrill 59 per cent., each for the financial year ended 31 December 2013) and scalable business models; both the Optimal Payments Group and the Skrill Group provide stored value digital wallet solutions to the online gambling industry; and both the Optimal Payments Group and the Skrill Group generate revenue streams from merchant and customer fees relating to fund movements on their digital wallet platforms. Optimal Payments' management team has, over the three years ended 31 December 2014, proven adept at increasing revenues, EBITDA, profitability margins (since 2012) and cash generation significantly year-on-year, through delivering strong organic growth from new and existing merchants and expansion into key strategic markets, coupled with tight financial discipline. The Board has for some time recognised the potential for a combination of the two businesses. The Directors believe that the Acquisition is transformational for both the Optimal Payments Group and the Skrill Group in that it creates a combined entity with significant international scale and reach that is positioned to capitalise on the substantial and growing payment processing and digital wallet markets, in particular within the rapidly expanding online gambling sector. The combination of the Optimal Payments Group and the Skrill Group would leverage the existing strengths and complementarities of both businesses and is expected to bolster the market share and reach of the Enlarged Group's combined product offering, broaden its geographic presence, diversify customer concentration and ultimately establish a highly scalable, leading global payment provider. Additionally, the Enlarged Group will be well-positioned in markets and sectors that display high barriers to entry, owing to a complex network of participants and a requirement for robust technological infrastructure as well as regulatory licences and approvals, all of which are difficult to replicate. Therefore, the Directors believe that there is a compelling strategic rationale underpinning the Acquisition which sees the joining together of two highly complementary businesses, well positioned for long term organic growth as discussed in further detail below. Highly Complementary Businesses and Product Diversification The Directors believe that there is considerable mutual benefit in combining the product portfolios of the Optimal Payments Group and the Skrill Group businesses as each of the Optimal Payments Group's and the Skrill Group's primary offerings, in terms of revenue generation, is the other's secondary line of business. The Skrill Group comprises Skrill, paysafecard and payolution. Skrill's principal product is the e- Wallet, an internet-based stored value account, established by merchants and customers, maintained by Skrill and enabling account holders to send and receive money instantly and securely, using a wide selection of payment options at a low cost and to pay for goods and services online. The e-wallet product has represented (adjusted for the paysafecard acquisition) 49 per cent. of FY2012 and, 49 per cent. of FY2013 and 44 per cent. of the revenue for the nine month period ended 30 September 2014 of the Skrill Group. Skrill also provides payment-related services through its Payment Service Provider ( PSP ) Gateway, Direct Payment Gateway and Prepaid MasterCard offering, although these together comprise a smaller part of the overall Skrill Optimal Payments Plc 13

14 business. Paysafecard contributed more than half of the Skrill Group revenues in FY2013 and the nine month period ended 30 September 2014 (53 per cent. and 55 per cent. respectively). Payolution offers a white label payment upon invoice solution to merchants and contributed less than one per cent. of FY2013 revenue and less than one per cent. of revenue for the nine month period ended 30 September Conversely, the Optimal Payments Group's principal product is the provision of straight through processing ( STP ) to merchants which includes the Asia Gateway service. Other than the Asia Gateway service, the majority of merchants using the services offered by the STP business are non-gambling merchants transacting online although the Optimal Payments Group's largest STP merchant is an online gambling merchant. The STP business represented 78 per cent. of Optimal Payments FY2012 revenue, 76 per cent. of Optimal Payments' FY2013 revenue and 75 per cent. of Optimal Payments FY2014 revenue. Furthermore, the Directors believe that the acquisitions of Meritus Payment Solutions and Global Merchant Advisors, Inc. which operate in the US and which completed on 23 July 2014 will contribute materially to Optimal Payments Group's STP revenue. The other parts of Optimal Payments' business are the NETELLER Stored Value segment, which also includes the Net+ Prepaid MasterCard product and the Optimal Payments Group's prepaid card issuing services and white label offering. The stored value proposition, in the same way as Skrill's e-wallet, is used by customers to pay for goods and services online or for the remittance of money to other account holders. Therefore, the Directors believe the Enlarged Group would enjoy a balanced segmentation of revenues between the two distinct divisions of stored value and payment processing. Additionally, the Acquisition provides the Optimal Payments Group with an incremental revenue stream in the form of pre-paid online voucher issuance through paysafecard. Skrill completed the acquisition of paysafecard on 8 February The table below illustrates comparable selected financial information for the Skrill Operating Group's products (Skrill, paysafecard and payolution) for the periods shown below and extracts without adjustment (save for conversion into US dollars for compatibility), the selected financial information in the columns headed Year ended 31 December 2012 and 2013 for paysafecard from the paysafecard audited historical financial statements for the years ended 31 December 2012 and 2013 which will be set out in the Prospectus, for Skrill from the financial statements of the Skrill Operating Group for the years ended 31 December 2012 and 31 December 2013 which will be set out in the Prospectus and from Skrill management information and for payolution from the Skrill Operating Group's management accounts. The table below does not represent the Skrill Operating Group's actual financial position or results. The actual financial position and results of the Skrill Operating Group (including paysafecard results from the date of its acquisition on 8 February 2013) will be set out in the Prospectus. Optimal Payments Plc 14

15 (US$)m (1) Year ended 31 December 12 month period ended September 2014 Revenue split Skrill paysafecard payolution Total Revenue Cost of Sales (2) (107.1) (2) (122.8) (2) (134.4) Skrill margin paysafecard margin payolution margin Total Margin EBITDA (pre-exceptional) (3) Cash balance (4) Debt Sources: paysafecard audited historical statements for the years ended 31 December 2012 and 2013, financial statements of the Skrill Operating Group for the years ended 31 December 2012 and 31 December 2013 and Skrill management information, unaudited financial information of the Skrill Operating Group for the nine months ended 30 September 2014 and Skrill Operating Group's management accounts. The financial information of the Skrill Operating Group for the rolling 12 months ended 30 September 2014 has been calculated by adding the income of the Skrill Operating Group for the nine month period ended 30 September 2014 to the income of the Skrill Operating Group for the financial year to 31 December 2013 and subtracting the income of the Skrill Operating Group for the nine month period ended 30 September (1) Converted from Euro to US dollars at the following exchange rates: (2012), (2013), (nine months to September 2013), (nine months to September 2014). (2) Cost of sales is calculated by aggregating the cost of sales for paysafecard, Skrill and payolution from the paysafecard audited historical financial statements for the years ended 31 December 2012 and 2013, financial statements of the Skrill Operating Group for the years ended 31 December 2012 and 31 December 2013 and Skrill Operating Group's management accounts. (3) Rolling 12 months ended 30 September 2014, 2013 and 2012, stated after non-recurring costs of $16.8 million, $13.2 million and $5.0 million respectively. (4) Excludes e-money float. The table below sets out selected financial information relating to the Optimal Payments Group's products for the financial years 2012, 2013 and 2014 which will be set out in the Prospectus. Optimal Payments Plc 15

16 (US$)m Year ended 31 December (1) Revenue split NETBANX NETELLER Other (2) Total Revenue Cost of sales (89.4) (121.5) (175.8) NETBANX margin NETELLER margin Other (2) Total Margin EBITDA (pre-exceptional) Cash balance Debt Sources: Optimal Payments audited historical statements for the year ended 31 December 2012, 31 December 2013 and 31 December 2014 (1) Includes Meritus and GMA from the date of their acquisition (2) Other includes investment income For illustrative purposes only, the table below sets forth (i) the revenue of the Enlarged Group for FY2014 on a combined basis (assuming that the Acquisition had taken place on 1 January 2014, and based on revenue generated by the Optimal Payments Group in the twelve months to 31 December 2014 and by the Skrill Operating Group in the rolling twelve months to 30 September 2014); (ii) the aggregated revenue for FY2012 and FY2013 of the Optimal Payments Group, Skrill Operating Group (excluding paysafecard) and paysafecard (in each case extracted without adjustment from the relevant actual historical financial statements and management accounts save for conversion into US dollars for comparability); and (iii) EBITDA for the periods shown below calculated on the basis of the respective revenue numbers. (US$m) (1) Year ended 31 December FY2012 FY2013 FY2014 (2) Total Revenue (3) EBITDA (pre-exceptional) Sources: Optimal Payments' audited historical statements for the year ended 31 December 2012, 31 December 2013 and 31 December 2014, paysafecard audited historical statements for the years ended 31 December 2012 and 2013, financial statements of the Skrill Operating Group for the years ended 31 December 2012, and 31 December 2013, unaudited financial information of Optimal Payments Plc 16

17 the Skrill Operating Group for the nine months ended 30 September 2014 and Skrill management accounts. The financial information of the Skrill Operating Group for the rolling 12 months ended 30 September 2014 has been calculated by adding the income of the Skrill Operating Group for the nine month period ended 30 September 2014 to the income of the Skrill Operating Group for the financial year to 31 December 2013 and subtracting the income of the Skrill Operating Group for the nine month period ended 30 September (1) Converted from Euro to US dollars at the following exchange rates: (2012), (2013), (nine months to September 2013), (nine months to September 2014). (2) Includes Meritus and GMA from the date of their acquisition. (3) Includes investment income of the Optimal Payments Group. Increased Digital Wallet Presence Aside from adding scale to the smaller respective parts of Optimal Payments' and the Skrill Group's businesses, the Directors believe that the Acquisition will assist the Enlarged Group to bolster market share and penetration within directly competing facets of both businesses, such as the stored value segment. Skrill's e-wallet and Optimal Payments' NETELLER product are both focused on the online gambling sector albeit with some exposure to different geographies and as such, the Optimal Payments Group and the Skrill Group will naturally have a number of existing stored value merchants in common. The Directors expect the Enlarged Group to leverage the increased merchant penetration, thereby reducing the need for direct sales activities and additionally enhance existing relationships through a strengthened offering. Within online gambling, both Optimal Payments and Skrill are focused on important end customers transacting high volumes through their respective NETELLER and e-wallet platforms ( VIP Customers ). The Skrill Group introduced its VIP Customer scheme in 2006 as a means to create customer loyalty, premised on retention of VIP Customers. Over the last five years, the Skrill Group's VIP Customer base has grown from approximately 5,400 in 2009 to 23,796 in Similarly, Optimal Payments' NETELLER product has a VIP Customer focus, with over 13,000 VIP Customers, and Optimal Payments operates an enhanced loyalty cash back programme and a dedicated VIP Customer support team. The Directors believe that Optimal Payments' and Skrill's respective stored value offerings have a number of existing VIP Customers in common. As a result of the critical mass that the Enlarged Group would enjoy in this business vertical, the Directors believe that there would be natural scale benefits, reductions in marketing spend and associated network effect benefits, which will create a more efficient VIP Customer marketing strategy and which will also result in the Enlarged Group being able to effectively monetise the expanded base of VIP Customers. Market Scale The Enlarged Group would leverage the extensive platforms of the Optimal Payments Group and the Skrill Group, with the following combined capabilities: 100+ payment types in 22+ languages and 41 currencies offered by the Enlarged Group. Combined revenues of US$235.1 million from stored value digital wallet solutions (US$89.6 million from NETELLER for the twelve month period ended 31 December 2014 and Optimal Payments Plc 17

18 US$145.5 million from Skrill's e-wallet 1 ) with 27 million registered customer accounts (8 million from NETELLER as at 31 December 2014 and approximately 19 million from Skrill as at 30 September 2014) and approximately 2,200 active merchants (approximately 1,200 from NETELLER as at 31 December 2014 and 1,000 from Skrill as at 30 September 2014), with approximately $7 billion transaction value processed in FY2014 by NETELLER 2 and approximately 3.6 billion transaction value processed in the twelve month period ended 30 September 2014 across the Skrill payment processing platform. Revenues of US$274.7 million from Optimal Payments Group's STP payment gateways for the twelve month period ended 31 December 2014, with over 56,500 active merchants (approximately 16,600 from Optimal Payments Group as at 31 December 2014 and over 40,000 from Skrill as at 30 September 2014) and 20+ global acquiring relationships. Revenues of US$180.8 million from paysafecard in the twelve month period ended 30 September 2014 with more than 442,000 points of sales worldwide as at 30 September 2014 and with payments being able to be made to approximately 5,700 online stores, with approximately 1.6 billion transaction value processed in the twelve month period ended 30 September On a historical basis (as at 30 September 2014 assuming the Acquisition had taken place at that time), the Enlarged Group would be a leading provider of stored value accounts in the global online gaming sector, STP payment gateway services in the global online gaming sector and a leading provider of e-wallet (or stored value account) services. Customer Diversification Historically Optimal Payments has derived a substantial proportion of its revenue from a single merchant, representing 34 per cent. of FY2012, 41 per cent. of FY2013 and 36.7 per cent. of FY2014 revenue. The Skrill Group derived 6 per cent. of FY2012 and 7 per cent. of FY2013 revenue from the same merchant. Whilst the acquisitions of Meritus Payment Solutions and Global Merchant Advisors, Inc. by Optimal Payments in July 2014 decreased the proportion of its revenue derived from the single merchant to approximately 27 per cent. for the period of 1 August 2014 to 31 December 2014, the Acquisition is a further major step forward in reducing Optimal Payments' customer concentration and mitigating principal customer exposure and risk, whilst establishing a well-rounded and broad customer base diversified across individual merchants, geographic regions and business verticals. In respect to presence in business verticals, the Skrill Group has a presence in the digital media segment that would be directly additive to the Optimal Payments Group's more focused customer base. The combination of customer bases specifically addresses the Optimal Payments Group's existing customer risk management strategy of developing a diversified customer portfolio. Geographic diversification There is a complementarity in the Optimal Payments Group's and the Skrill Group's geographic areas of operation and revenue generation, stemming from a low overlap of competing presence 1 All revenue from the Skrill Group, with the exception of prepaid revenue from paysafecard, is attributed to e- Wallet (including payment gateway revenue). 2 A transaction for these purposes is an upload by a member, a withdrawal by a member, a payment from a member to a merchant, a payment from a merchant to a member or a money transfer between members. Optimal Payments Plc 18