Investcorp and the Moneybookers Bid Harvard Case Solution & Analysis

In January 2007, Hazem Ben-Gacem, managing director and co-head of Investcorp Technology Partners (ITP), should decide what to offer at an auction for Moneybookers Limited, one of the top three e-payment solution providers in Europe. Nonetheless, about 70% of Moneybookers revenues were related to trades from on-line gaming sites (down from 100% in 2002). Although the dissertation was that ecommerce transactions would soon make up a much bigger chunk of the earnings of the company, high gaming revenue raised some questions.

Between now and when Bengacem had first submitted a bid of €60 million for Moneybookers back in November 2006, the U.S. Congress had enacted the Unlawful Internet Gambling Enforcement Act putting pressure on e-payment businesses with betting exposure. How would this transaction be viewed by investors in ITP? Ben-Gacem also worried about whether Moneybookers could manage the increase of its business as well as the development of regulation around financial transactions. Moneybookers had effectively become a type of all the coverage that went along with it and bank with deposit accounts and capital adequacy requirements. But could an internet startup keep the accounting and compliance standards essential to manage such scrutiny? Could it succeed-and if it did, what would it be worth?

PUBLICATION DATE: February 02, 2011 PRODUCT #: 811013-PDF-ENG

This is just an excerpt. This case is about INNOVATION & ENTREPRENEURSHIP

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