The top line
- 888 will pay Caesars Entertainment £2.2bn ($3.04bn) for the entire William Hill international business.
- The buyout will be funded by £1.64bn of new loans, a £150m revolver facility and via a £500m right issue. 888 will also take on £0.8bn of William Hill debt.
- In 2020 the combined business would have had revenues of $2.5bn and adjusted EBITDA of $464m. The deal has been completed on a historical multiple of 9.2x.
Sweet Caroline: 888 CEO Itai Pazner hailed the “transformational” deal which will give the new entity a combined market share in the UK of 12.3% (based on the figures from the UK Gambling Commission’s monthly survey which cover 80% of the market) and 10% shares in core markets Italy and Spain. Pazner noted 888 was “pleasantly surprised” in its due diligence process to find William Hill in the UK had “good momentum” with “perhaps the best marketing campaign around the Euros with effectively the unofficial anthem” as part of its TV ad campaign.
“We were pleasantly surprised to see the business performance growing into this year,” said Pazner. “This is a result of the investment William Hill did in their product and offering in the last 24 months. They are seeing similar experience as us.”
Are you being served? Contrary to some speculation, 888 confirmed it would be retaining the “right-sized” retail estate of circa 1,400 shops and sees opportunities in omni-channel. Pazner noted that “no further rationalization was needed” and added that since the summer reopening, the retail business had returned to “nearly or over” pre-Covid levels. “That reflects the high quality of the shops that remain,” he added.
Pick and mix: 888 said it was committed to future brand positioning in key markets (including the ailing Mr Green which he noted would be retained for its position in the Nordics) with head of strategy Vaughan Lewis talking about matching up the “amazing” 888 with the “iconic” William Hill. “This is a combination that has been discussed many times over the years,” Lewis added. On platform synergies and execution, Pazner said the two companies had “really great components on both sides and the best operational teams.”
Back in the USA: Pazner confirmed that Caesars would retain the rights to the William Hill brand in the U.S. but suggested the experiences of the William Hill international team in the US market would be leveraged when it comes to 888’s own U.S. plans which includes the SI Sportsbook JV.
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