Specifics of the transaction
888 Holdings has announced that it is selling its bingo business for $50m. The global gambling group announced the sale of all of its B2B and B2C bingo businesses to Saphalata Holdings on Wednesday. The buyer is a part of Broadway Gaming, a group of online casino and bingo platforms.
a possible earnout worth as much as $4m
The total consideration of the deal is $50m on a debt-free cash-free basis. This includes a possible earnout worth as much as $4m depending on certain revenue-based performance targets over a six-month period. 888 has committed to providing some transitional services to the UK-based Broadway Gaming for up to a year after completion of the deal.
Completion of the deal is still subject to the reorganization of the bingo business. The new structure will then need to acquire a license from the UK Gambling Commission (UKGC). 888 expects the deal to complete at some stage during the second quarter of next year.
Reasons for the sale
According to a press release issued Wednesday, 888 is selling its bingo arm to focus on its core B2C operations, as well as its expansion in the US. The decision follows a recent strategic review by the operator. It will now look to deploy further resources to continue growing in its core markets. This shift in focus follows the company’s recent acquisition of the non-US assets of William Hill in a deal with Caesars Entertainment worth ￡2.2bn ($2.9bn).
888 previously operated its bingo business through its Dragonfish subsidiary, offering numerous B2C bingo platforms, as well as providing various types of B2B services. Everything relating to 888’s bingo businesses is included in the sale, such as technology, operations, assets, consumer-facing brands, and B2B clients.
The bingo side of 888’s offering generated revenue of about $65m in 2020, with EBITDA reaching $7.4m. The assets are valued at about $71m, according to the June 30, 2021 balance sheet.
Reaction to the news
Itai Pazner, 888 CEO, commented on the sale. He said: “The high-quality bingo business has been an important part of 888’s history, and over many years we have developed an advanced B2B offering alongside a suite of popular consumer-facing brands.”
888 wants to focus on growing its key verticals
Despite affirming that the future of the bingo space is bright, Pazner confirmed 888 wants to focus on growing its key verticals of poker, sport, and casino. He said the group aims to become one of the leading online gaming and betting businesses in the world.
Broadway Gaming CEO David Butler also welcomed the deal, believing that it will allow the company to develop a stronger footprint across the world in key regulated bingo markets. He stated that the company is “very excited about our plans for the future, as we work closely together to become the pre-eminent online bingo business globally.”