888 to Finish William Hill Purchase in Q2
Leading betting and gaming operator 888 Holdings has provided investors with an update on when it expects to complete its acquisition of William Hill’s international assets. It agreed to purchase the bookmaker’s non-US assets in September 2021 and now anticipates that the deal will be finalized in the second quarter of this year. The operator is also in the process of selling off its B2C and B2B bingo business, in order to focus on its US operations.
888 Holdings has outlined plans to complete its acquisition of William Hill’s international assets this year, after capital is raised and shareholders have voted.
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Betting Shops Face Uncertainty
888 Holdings has published a new update detailing the progress of its William Hill asset buyout. After agreeing to acquire the famous bookmaker’s international assets last September for a sum of £2.2 billion, 888 is hoping that the deal will be done and dusted before the summer.
888 Holdings is in the process of acquiring William Hill’s European assets, which were put up for auction by Caesars Entertainment last year. Caesars completed its takeover of William Hill last April, after paying £2.9 billion for the bookmaker’s sports betting expertise. The takeover has given it a strong advantage over the competition in the emerging US betting market.
Now the Las Vegas casino giant is set to make the majority of that cash back, after selling off the bookmaker’s non-US assets to 888. From the outset, it made it clear that it was only interested in retaining William Hill’s US operations. That left its remaining assets facing an uncertain future, including its 1,400 UK betting shops.
US private equity firm Apollo Global Management and German operator Tipico both expressed an interest in buying the assets, but lost out to 888 Holdings. 888 has been in business since 1997 and is one of a select number of gambling firms listed on both the FTSE 250 Index and the London Stock Exchange.
888 hopes to save as much as £100 million a year by combining its assets. The enlarged group will be made up of more than 12,000 employees and will cement 888 as one of the world’s largest betting and gaming groups. The takeover offers a range of possibilities for 888, but it has not provided all of William Hill’s staff with peace of mind yet.
It remains unclear whether 888 will retain control of William Hill’s extensive portfolio of retail shops. It has been reported that Apollo is still interested in the betting shops, after losing out to Caesars in last year’s auction. BoyleSports and Betfred’s Fred Done have also reportedly shown an interest in the stores.
£500M to be Raised
Addressing shareholders, 888 said that it plans to publish a combined circular and prospectus for the Acquisition and Capital Raise during the second quarter of 2022. As stated last year, 888 intends to raise approximately £500 million of gross proceeds by issuing new equity. The capital raise is expected to be completed before the William Hill takeover is finalized.
Shareholders will then be given the opportunity to vote on whether they approve of the acquisition going ahead or not. It is expected that shareholders are likely to approve the deal and that it will be completed during the second quarter of 2022.
888 is already in the final stages of the acquisition, having secured mandatory antitrust and regulation clearances. In its statement, 888 noted that the completion of the deal is dependent on the satisfaction of any remaining conditions. This latest report follows 888’s last progress update in November.
Speaking at the time, 888 CEO Itai Pazner explained what the deal would mean for his company. The addition of William Hill’s non-US assets will support 888 in its vision to become one of the world’s leading online betting and gaming operators. It will benefit from enhanced scale, technology and diversification.
888’s platform will also receive a significant boost thanks to the addition of iconic brands to its portfolio. Reiterating its commitment to the acquisition, Pazner revealed that Guy Cohen had been appointed the role of SVP, Director of Integration. Cohen is working alongside the senior team at William Hill to ensure a smooth integration process. Pazner stated:
“I’m delighted that we have now checked off a number of important milestones towards completion of the Acquisition. Given the strong progress we have made, we now expect the transaction to complete in the first quarter of 2022 and are excited about the opportunities ahead of us as we combine two powerful and complementary businesses.”
888 Sells Bingo Business
Last fall, Pazner was optimistic about the progress of the deal, claiming that it could be completed during the first quarter of 2022. The operator’s latest statement did not offer any explanation as to why the completion had been delayed, although it has also been organizing the sale of its bingo business in recent months.
On December 15th 2021, 888 announced that it had reached an agreement to sell all of its B2C and B2B bingo business to Saphalta Holdings, which is part of the Broadway Gaming Group. The sale was made for a total consideration of $50 million and will allow 888 to focus its efforts on its core platform.
The B2B bingo businesses are operated under the Dragonfish brand, while the B2C businesses consist of a number of brands. The bingo business, which was predominantly UK-based, generated roughly $65 million in revenue in 2020, alongside EBITDA of $7.4 million. Its loss before tax was $76.4 million, including a goodwill impairment of $79.5 million.
As set out in the June 2021 balance sheet, the value of the gross assets subject to the transaction was in the region of $71 million. The completion of the transaction requires that the bingo business is completely reorganized and given its own UK license by the Gambling Commission. It is expected that the sale of 888’s bingo business will be completed during the second quarter of 2022.
Announcing the sale, 888’s CEO thanked his team for its hard work over the years. Despite selling off the business, he reassured that the future of bingo is bright. For Broadway Gaming, the acquisition offers a valuable opportunity to expand its presence in the bingo market. David Butler, CEO of Broadway Gaming said:
“We are delighted to reach an agreement with 888 to acquire its bingo business and platform. By combining these with our existing business and brands, which include ‘Butlers Bingo’, we will be able to achieve an even stronger global footprint in key regulated bingo markets.”
