REG - 888 Holdings plc - Sale of Latvia Business

888 HoldingsAnnouncement

22/05/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230522:nRSV1141Aa&default-theme=true

RNS Number : 1141A  888 Holdings plc  22 May 2023

 

22 May 2023

 

888 Holdings Plc

("888" or "the Group")

 

Sale of Latvia Business

Non-core asset sale for up to £22 million to increase focus on Core and
Growth markets

 

888 (LSE: 888), one of the world's leading betting and gaming companies with
internationally renowned brands including William Hill, 888 and Mr Green,
today announces that it has reached an agreement to sell its Latvian business
(the "Transaction"), to Paf Consulting Abp. The total consideration is up to
€28.25 million (£24.6 million) for 100% of the business on a cash-free
debt-free basis, with an initial consideration of €24 million (£20.9
million) to be paid in cash upon completion of the Transaction, and a further
potential earn-out of up to €4.25 million (£3.7 million) payable in 2024
upon completion of the 2023 audited financials. The Group owns 90% of the
entity and the consideration will be used for general corporate purposes.

The Latvian business operates with a local licence, using the William Hill and
Mr Green brands. The Group will provide a brand licence to continue the usage
of these brands within Latvia for a limited period. The business operates
largely as an independent entity, with its own management team and operating
on a separate technology platform. As such the Transaction is expected to have
no impact on the ongoing operations and synergy program of the Group and is
consistent with the Group strategy to focus on core and growth market plans.

In 2022 the Latvia business generated net revenue of £9.1 million and EBITDA
of £2.5 million, and the value of the gross assets subject to the
transaction, as set out in the 31 December 2022 balance sheet, was
approximately £9.3 million.

Completion of the Transaction is conditional upon, amongst other items, the
carve out of the Latvian subsidiary from the Group's supplier contracts and
incorporation of the Latvian subsidiary into Paf's contracts, certain change
of control consents and the payment of a dividend by the Latvian subsidiary.
Completion is currently expected to occur in the coming weeks.

 

Lord Mendelsohn, Executive Chair of 888, commented:

"We continually review our asset base to ensure that we are only holding
assets that both contribute to our long-term strategy and will maximise value
for our shareholders. As a business, our relatively limited exposure in the
Baltic region means that the region is not one of our core or growth markets
where we prioritise our investments.

The Latvian business is a high-quality, locally regulated business, with an
excellent team that has built a strong market position. I would like to
express my sincere thanks to the team for their dedication during their time
with the Group and I am highly confident that under new ownership with Paf,
the business will continue to flourish."

Janis Tregers, co-founder and head of Latvia board, commented:

"We launched in 2012 as 11.lv, and in 10 years, have built a market-leading
position in Latvia, with over 10% market share. In 2018, we sold 75% of the
business to Mr Green at an enterprise value of €3.7 million, and this
transaction to sell the entire business for a valuation of up to €28 million
reflects the hard work of our team across the business resulting in
significant value creation. Under the new ownership with Paf, I am confident
that the business will continue to go from strength to strength, delivering
great products and experiences for our customers."

Christer Fahlstedt, CEO of Paf, commented:

"We are thrilled to get the opportunity to continue to build on a great
Latvian success story. With a long-term perspective, we are convinced that the
Latvian market is moving in the direction of increased player protection and
thereby a great strategic fit for Paf."

 

This announcement contains inside information. The disposal of the Latvia
business constitutes a class 2 transaction for the purposes of the UK Listing
Rules.

Tekkorp Capital acted as financial adviser to 888.

 

 

Enquiries and further information:

 888 Holdings Plc                                +44(0) 800 029 3050
 Lord Mendelsohn, Executive Chair

 Yariv Dafna, Chief Financial Officer

 Vaughan Lewis, Chief Strategy Officer

 Investor Relations                              ir@888holdings.com (mailto:ir@888holdings.com)

 James Finney, Director of IR

 Media                                           888@hudsonsandler.com (mailto:888@hudsonsandler.com)
 Hudson Sandler                                  +44(0) 207 796 4133

 Alex Brennan / Charlotte Cobb / Andy Richards

 

 

About 888 Holdings Plc:

888 Holdings plc (and together with its subsidiaries, "888" or the "Group") is
one of the world's leading betting and gaming companies. The Group owns and
operates internationally renowned brands including William Hill, 888, and Mr
Green. In addition, the Group operates the SI Sportsbook and SI Casino brands
in the US in partnership with Authentic Brands Group.

 

Incorporated in Gibraltar, and headquartered and listed in London, the Group
operates from offices around the world and employs over 11,000 people
globally.

 

The Group's mission is to lead the gambling world in creating the best betting
and gaming experiences, bringing unrivalled moments of excitement to people's
day-to-day lives. It achieves this by developing state-of-the-art technology
and content-rich products that provide fun, fair, and safe betting and gaming
entertainment to customers worldwide.

Find out more at:

http://corporate.888.com/ (http://corporate.888.com/)

 

About Paf:

Paf is a Nordic gaming company founded on Åland in 1966 to generate funds for
the benefit of society. The founding associations were The Red Cross, Save The
Children, the public health service and a children's welfare foundation.

Paf is an award-winning industry leader in responsible gaming.

Paf (Ålands Penningautomatförening) is licensed and controlled by the
Government of Åland and holds online gambling licenses in Sweden, Estonia,
Latvia and Spain, as well as operating physical gaming operations on more than
30 cruise ships in the Baltic and the North Sea.

Paf has 330 employees representing 30 nationalities.

Find out more at:

https://aboutpaf.com/ (https://aboutpaf.com/)

 

Important Notices

This announcement may contain certain forward-looking statements, beliefs or
opinions, with respect to the financial condition, results of operations and
business of 888. These statements, which contain the words "anticipate",
"believe", "intend", "estimate", "expect", "may", "will", "seek", "continue",
"aim", "target", "projected", "plan", "goal", "achieve", words of similar
meaning or other forward looking statements, reflect 888's beliefs and
expectations and are based on numerous assumptions regarding 888's present and
future business strategies and the environment 888 will operate in and are
subject to risks and uncertainties that may cause actual results to differ
materially. No representation is made that any of these statements or
forecasts will come to pass or that any forecast results will be achieved.
Forward-looking statements involve inherent known and unknown risks,
uncertainties and contingencies because they relate to events and depend on
circumstances that may or may not occur in the future and may cause the actual
results, performance or achievements of 888 to be materially different from
those expressed or implied by such forward looking statements. Many of these
risks and uncertainties relate to factors that are beyond 888's ability to
control or estimate precisely, such as future market conditions, currency
fluctuations, the behaviour of other market participants, the actions of
regulators and other factors such as 888's ability to continue to obtain
financing to meet its liquidity needs, changes in the political, social and
regulatory framework in which 888 operates or in economic or technological
trends or conditions. Past performance of 888 cannot be relied on as a guide
to future performance. As a result, you are cautioned not to place undue
reliance on such forward-looking statements. The list above is not exhaustive
and there are other factors that may cause 888's actual results to differ
materially from the forward-looking statements contained in this announcement.
Forward-looking statements speak only as of their date and 888, its respective
parent and subsidiary undertakings, the subsidiary undertakings of such parent
undertakings, and any of such person's respective directors, officers,
employees, agents, affiliates or advisers expressly disclaim any obligation to
supplement, amend, update or revise any of the forward-looking statements made
herein, except where it would be required to do so under applicable law. No
statement in this announcement is intended as a profit forecast or a profit
estimate and no statement in this announcement should be interpreted to mean
that the financial performance of 888 for the current or future financial
years would necessarily match or exceed the historical published for 888.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  DISEAESFADEDEAA