888 offloads bingo business in $50m Broadway Gaming sale
London-listed operator sells core Dragonfish operations and B2C bingo brands to focus on sports betting and igaming
888 has sold its entire B2C and B2B bingo businesses to Broadway Gaming subsidiary Saphalata Holdings for $50m (£37.6m).
The transaction, which is on a cash-free, debt-free basis includes a potential earnout payment of $4m subject to an earnout period of six months. The $50m initial consideration will be paid upon completion.
The sale encompasses the Dragonfish-powered B2B services as well as 888’s B2C bingo brands, which operate on a separate technology platform and are serviced by its own designated 888 operations team. This includes all technology, assets, operations and all current B2B clientele.
888 has also agreed to provide Broadway with certain transitional services for a period of up to 12 months from completion, in accordance with an agreed fee schedule.
888 has confirmed the sale follows the completion of a strategic review of its entire business with the aim of improving its focus on its core platform.
The London-listed firm suggested this would enable greater resources to drive growth in its core markets and reduce compliance complexity arising from related accounts across B2B and B2C bingo as well as 888’s core platform.
Elaborating on this rationale, 888 CEO Itai Pazner cited a desire to focus on just the key product verticals of casino, sport and poker.
“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,” Pazner said.
“As part of an enlarged business, I am very confident that the future for the bingo business is bright. I would like to express my immense gratitude for all of the hard work of the team over the years,” the 888 CEO added.
888’s bingo business, which is predominantly UK-based, generated 2020 revenue of $65m and an EBITDA contribution of $7.4m, offsetting a loss before tax of $76.4m and a goodwill impairment of $79.5m.
The sale represents a substantial discount on the value of all related assets declared in the firm’s 2021 balance sheet of $71m.
Completion is currently expected to occur during the second quarter of 2022.
Broadway Gaming CEO David Butler hailed the bingo expansion deal as enabling Broadway to achieve an “even stronger global footprint” in key regulated bingo markets.
“We have worked intensively with the 888 group over the course of the last few months and have been very impressed by the quality of the bingo platform and product, the B2C and B2B businesses, its approach to safer gambling and player protection, and above all the management team,” Butler said.
“We see significant further expansion opportunities in both the B2C and B2B segments and are very excited about our plans for the future, as we work closely together to become the pre-eminent online bingo business globally,” he added.
London-based VC consultancy Oakvale Capital served as primary financial adviser to 888 on the transaction.