888 sells Dragonfish bingo unit to Broadway for $50m
Broadway Group’s Saphalata Holdings Ltd is due to acquire the Dragonfish online bingo business units of 888 Holdings for a total consideration of $50 million, as the latter looks to focus on its US operations and other B2C assets.
Under the terms of the transaction Broadway Group will integrate 888’s Dragonfish B2b holding and multiple B2C operators, including its technology, assets, operations, clientele and consumer facing brands.
The $50 million total transaction will be paid in cash upon completion of the transaction on a cash-free debt-free basis and will include potential earnout of up to $4 million, which will be payable within ‘approximately six months’ following completion of the takeover dependent on revenue-based performance criteria.
Completion of the takeover, which is expected in the second quarter of 2022, is further dependent on the reorganisation of the bingo business and the new structure of this holding receiving a UK Gambling Commission (UKGC) licence.
888 made the decision to sell its bingo divisions following a strategic review in which the LSE-registered gambling group concluded to improve focus on its core platform, drive revenue into ‘core markets’ such as the US and eliminate a complex compliance situation due to related accounts across the B2C, B2B and core platforms.
Itai Pazner, 888 CEO, said: “Following a strategic review, we have taken the decision to sell the bingo business. This strategic Transaction will enable 888 to further increase its focus on its core platform and unified, scalable and proprietary technology, and grow our key product verticals of casino, sport and poker, as we continue in our mission to be one of the world’s leading online betting and gaming businesses.
“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. 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.”
By acquiring 888’s bingo holdings, Broadway will be securing access to a primarily UK-based business with 2020 revenue of $65 million and EBITDA of $7.4 million, the value of which was estimated at US$71 million according to the group’s 30 June 2021 balance sheet.
Broadway aims to become the leading UK online bingo network, expanding its brand portfolio with the B2C brands of Wink, Costa and RobinHood bingo. 888’s bingo teams will also transfer to Broadway to play a ‘key role in its progressive ambitions’, which the firm has stated are not just limited to the UK.
David Butler, CEO at 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.
“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. 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 preeminent online bingo business globally.”