888 Holdings Signs Purchase Agreement to Sell Select US B2C Assets to Hard Rock Digital

Home » 888 Holdings Signs Purchase Agreement to Sell Select US B2C Assets to Hard Rock Digital

888 Holdings, the London-listed firm, has officially completed its strategic consideration of its American B2C operations. The outcome of the deliberation was that the firm came to the agreement to sell chosen assets to Hard Rock Digital. However, completion of the sale is subject to appropriate regulatory validations, in addition to other things.

Reason for sale:

This new event follows a range of strategic moves by the firm, involving the intention to rebrand as Evoke plc and a devotion to completely focus on its core markets.

In early March, during a review of US B2C operations, the firm explored different ways to increase business value. The firm said it is reviewing options like selling all or just a part of its aforementioned B2C operations, conducting other strategic transactions or gradually phasing out its US operations.

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Relatedly, the firm has slowly begun a controlled exit of its American operations, with a plan to close them completely by the end of this year, which is subject to regulatory processes and approvals, according to the official press release.

Furthermore, it was revealed that the firm has cut ties with Sports Illustrated (SI), under whose brand it operates SI Casino in Michigan and SI Sportsbook in Virginia and Colorado. In addition to this, 888 also operates in New Jersey (888 casino), Virginia, Colorado and Michigan.

Economic benefit:

The exit from the said operations is projected to generate a repeating yearly adjusted EBITDA benefit of roughly £25m from next year onward, with roughly £10m set aside for reinvestment in value creation and expansion initiatives. But even the transition comes at a cost, so that’s why the company expects a one-off cash outlay of roughly £40m associated with the exit from US, scattered over the time frame from this year to 2029, which involves a termination fee for brand licensing.

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Relatedly, the financial consequences of the exit and sale strategy are calculated into the firm’s formerly revealed financial goals. Also, with income expected for the first quarter of this year to be between £420m and £430m, the firm has set a target of 5% to 9% profit increase for the entire year 2024.

The company also aims to increase its adjusted EBITDA margin by one hundred basis points yearly and leverage ratio under 3,5x by the end of 2026. Additionally, the firm currently trades at GBp89.00, 0.56%.

The sale will be finished by the fourth quarter of this year:

According to the terms of the contract with Hard Rock Digital, the transaction of the assets will be carried out in several stages, and the final realization is planned for the 4th quarter of this year. However, it is also subject to specific terms, involving necessary regulatory validations.

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