Online Poker California has just confirmed that Optimal Payments will soon be acquiring the California-based payments processor – Meritus Payments Solutions – for $210 million. Optimal payments will also be buying our Global Merchant Advisors in a deal that is expected to fetch $15 million. Optimal Payments is perhaps better known as the owner of Netbanx and Neteller – some of the world’s most popular payments processing options.
The new deals that have been announced will allow this company to position itself well, as online poker regulation becomes more widespread in the US, notably California. The terms of the deal suggest that Optimal Payments will purchase Meritus Payment Solutions for $60 million in stock (over 4 years) and $150 million in cash. As for the Global Merchant Advisors deal, some $10 million will be paid when the deal is closed, in addition to $5 million based on future performance.
A Great Deal for Optimal Payments
The President and Chief Executive Officer of Optimal Payments praised the deal, as he feels that the US market presents the greatest expansionary opportunity for the company. Among the most notable candidates for payments processing in California is Meritus Payment Solutions. On the other side of the deal, the principal and co-founder of Meritus – Alan Kleinman – is excited about the prospects of the deal. He sees the buyout as a great way to achieve strategic objectives, build a global infrastructure and achieve the scale needed in the payments market. Kleinman is of the opinion that both companies share a common philosophy and future growth plans.
Both Global Merchant Advisors and Meritus Payment Solutions have posted strong earnings recently. The existing relationships in place with these payment options will bode well for further expansionary efforts in the California online poker market. Optimal Payments will be well positioned when it comes to regulated online poker in California, and elsewhere, but it will not be able to influence legislation with these deals. In fact, it has been reported that Neteller may be a hindrance to the company obtaining a licence. In 2007, the founders of Neteller (S. Lawrence and J. LeFebvre) were arrested on charges of money laundering vis-a-vis online gambling. Since the bad actor clause is present in both California online poker bills, ownership and acquisition of Neteller may be a toxic asset.