SPORTS BETTING

UK – 888 confirmed as the new owner of William Hill’s non-US assets

By Phil - 9 September 2021

Betting operator 888 has now confirmed it has won the race to buy the non-US assets of William Hill from Caesars for approximately £2.2bn in what it has a described as a ‘transformational acquisition creating a global leader with significant scale in the fast-growing online sports betting and gaming industry.

888 said the deal would bring together ‘two highly complementary businesses’ and ‘combine ‘two of the industry’s leading brands.’ The acquisition represents a transformational opportunity for 888 to significantly increase its scale, further diversify its product mix and accelerate the upward shift of its revenue growth profile. The combination of 888 and WHI is expected to deliver significant operating efficiencies, including pre-tax cost synergies of at least £100m per year1, leading to improved profit margins. On a pro forma normalised basis the enlarged group’s annual revenue and adjusted EBITDA in 2020 would have been $2.5bn and $464m, respectively.

Itai Pazner, CEO of 888 said: “The acquisition of William Hill International is a transformational and hugely exciting moment in 888’s history. This transaction will create one of the world’s leading online betting and gaming groups with superior scale, exceptional brands, increased diversification, and a platform for strong growth. William Hill is an iconic sports brand, making it the ideal complement to 888, one of the leading global online gaming brands. Our strategies are also complementary, being digitally led, customer focused, and committed to player protection and raising industry standards around safer gambling. We are also excited about the opportunities that the Retail business provides and see significant brand benefits to the Enlarged Group from its large estate.

“We have been incredibly impressed with the William Hill management team, and I look forward to working with them and the wider William Hill team to create great products for our customers, driven by best in class technology, powerful brands, and benefitting from our significantly enhanced scale.”

Lord Jon Mendelsohn, Chair of 888 said: “This acquisition is an incredible opportunity to combine our world-class gaming brand with a unique and iconic sports betting brand to create a global leader in the online sports betting and gaming industry. We believe the acquisition will create significant value for shareholders, creating a combined business with leading technology, products and brands across sports betting, gaming and poker, supported by top quality management talent from both businesses.”

Ulrik Bengtsson, CEO of WHI said: “The William Hill and 888 strategies are highly complementary with an absolute focus on the product and customer experience. Scale is increasingly important in our sector and the combination of the businesses will provide a powerful alignment of brands and technology. This transaction is a testament to the progress William Hill has made over the last two years, our unrelenting focus on customer, team and execution and, most importantly, the dedication and commitment of William Hill colleagues. I am immensely proud of what we have achieved and I would like to take this opportunity to thank all of our colleagues who have made this possible. I look forward to working with 888 as we transition to the new ownership structure.”

The Enlarged Group will be strongly growth-oriented, benefitting from a clear scale advantage and strong product and geographic diversification. With a focus on regulated markets, it will be able to offer customers world-class products, supported by leading betting and gaming brands, driving sustained growth and shareholder value creation over the medium and long-term.

For revenue market share, William Hill is a top-3 brand in both Retail and Online sports betting. Its core territories in Europe are Italy, Spain and the Nordics, and it has recently launched in Latin America. Alongside the William Hill brand, WHI also operates the Mr Green brand across Europe. 2020 revenue came in at £1,157m. The retail estate was closed for a significant portion of 2020, reflecting disruption from COVID-19. Independent analysis suggests that this had a c.£83m impact on retail EBITDA, suggesting a total normalised 2020 EBITDA for WHI of c.£240m.

Recent product improvements have driven a significant acceleration of growth, with H1-2021 online revenue growth of 38%, including 56% growth in the UK, delivering strong market share gains.

After the repayment of debt and other working capital adjustments, Caesars expects to receive net proceeds from the transaction of approximately £835m or $1.2bn. The transaction is subject to receipt of the approval of shareholders of 888 Holdings and regulatory approvals. Caesars’ expectation is that the transaction should close during the first quarter of 2022.

“I’d like to personally thank Ulrik and all of the team at William Hill for their professionalism and dedication while they have been part of Caesars and particularly during the sale process. I am delighted that, as we said we would when we announced the offer for William Hill PLC, we have found an owner for the William Hill business outside the US which shares the same objectives, approaches and longer-term ambitions of that business,” said Tom Reeg, CEO of Caesars Entertainment, Inc.