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888 Holdings Completes its Acquisition of William Hill Non-US Assets From Caesars
By Jeff Osienya Jul 05, 2022 IndustryLondon-listed 888 Holdings has officially confirmed the closure of its merger with William Hill after acquiring the company’s non-US assets from Caesars in a $2.35 billion transaction. Ulrik Bengtsson, the former William Hill Group, has left the company.Leading global online gaming operator 888 Holdings has completed its acquisition of William Hill’s Non-US Assets from Caesars for a reported $2.35 billion. The sale of William Hill’s Non-US assets can be traced back to October 2020, when the 888 CEO first expressed interest in the potential acquisition.
In the month before (September 2020), Caesars had announced that it was acquiring William Hill for a reported $3.7 billion price tag. Right there, industry analysts indicated that the William Hill buyout was primarily meant to expand Caesar’s reach in the US Market. However, upon completing the acquisition, it became pretty clear to anyone who noticed that Caesars did not intend to keep hold of the William Hill Non-US Assets.
The focus on the US market was a no-brainer for Caesars as William Hill was already having a tough time in its home market. The UK betting juggernaut had closed down more than 700 of its retail betting shops in the UK due to the introduction of new regulations in 2019. As a result, the maximum stake on lucrative FOBTs (fixed-odds betting terminals) was reduced by 80%, from £100 to just £2. Additionally, following the pandemic, William Hill was again forced to halt the operations of 119 retail betting kiosks after the demand for in-person wagering dwindled.
A Competitive Bidding Victory and A Price Slash
With its open declaration that it wanted to sell the 1,500 shops owned by William Hill in the UK, Caesars had all the industry giants on high alert. A bidding war ensued, pitting industry giants like Boyle Sports, Apollo Capital Management, Tipico, CVC Partners, and 888 holdings.
Come September 2021, the bidding process concluded with an announcement that Caesars and 888 Holdings had reached a final agreement of $2.88 billion. However, the terms of the deal were revised, and the deal eventually closed for $2.35 billion. The justification for the drop in the enterprise value of William Hill’s Non-US assets was due to changes in macro-economic and regulatory environments since the announcement of the original agreement. The deal is now finally done and dusted, following shareholder approval.
Meanwhile, Caesars, which was represented by Deutsche bank and Linklaters LLP in this deal, expects to gain $730M net proceeds from this deal after the repayment of debt and other working capital adjustments. The company plans to use the net proceeds from this deal to go towards a cumulative debt reduction effort. It reported a startling $13.5 million cumulative debt at the end of its first quarter this year, which is among the gaming industry’s most enormous debt burdens. So, pulling any available resources towards reducing that amount will be vital to keep things running smoothly for Caesars.
Ulrik Bengtsson Departs Amid a Top-Brass Shakeup
With its acquisition of William Hill’s Non-US assets, 888 Holdings’ combined business now undoubtedly makes it one of the largest online gambling operators in the world. Expressing his excitement about the potential that 888 Holding currently holds, the company’s CEO Itai Pazner said:
Quote“This combination brings together two high-quality businesses to create a powerful global betting business. We believe the acquisition will create significant shareholder value by creating a business combined with leading sports betting and gaming technology, products, and brands. With a high-quality management team made up of talent from both businesses, I am confident in our future plans.”
Additionally, following the closure of this significant deal, 888 Holdings has changed things up at the helm of the newly combined company. Ulrik Bengtsson, who has served as the William Hill CEO since September 2019, has left the company, along with Eric Hageman, who was the company CFO from June 2021. In their place, Itai Pazner, the current 888 Holdings CEO, has retained his role in the merged company, whereas Yariv Dafna comes in as the new CFO. In addition, Vaughan Lewis has been appointed as the new CSO, while Guy Cohen, who has been serving as Interim COO, has been confirmed for a full-time role.
The former head of Regulatory Compliance at Revolut, Harinder Gill, is now the Chief Risk Officer at 888 Holdings. Mark Skinner and Satty Bhens will continue in their roles as Chief People Officer and Chief Product and technology officer, respectively. William Hill’s UK managing Director Phil Walker will retain his position, while former 888 COO Naama Kushnir will now take up a new role as the Chief Transformation Officer.
Speaking on the changes made to the leadership, CEO Pazner said:
Quote“We have built an outstanding leadership team, combining strengths from across both businesses, as I look to the future, the combination of our product and content leadership, powered by our proprietary technology and world-class brands, gives us a powerful platform for growth. I would like to thank Ulrik and Eric for the great job they have done at William Hill, and I wish them well for the future.”
A Bright Future Ahead for 888 Holdings
888’s objective moving forward will be to manage any future organizational changes to maintain and boost the drive in each of its businesses while and maximize the entire company’s momentum. The expanded 888 Holdings has now set its sights on achieving pre-tax synergies of at least £100 million by 2025.
After the completion of its acquisition, 888 Holdings now plans to initially report results in four segments, namely: 888 (includes US operations), William Hill Online UK, William Hill Retail UK, and William Hill International.
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