The gaming and betting company 888 Holdings has recently unveiled a comprehensive restructuring plan following a strategic review that began in early March.
This review aimed to explore various options to enhance shareholder value, including a partial or complete sale of its US B2C (Business to Consumer) operations.
The company announced a sale agreement with Hard Rock Digital, though specifics about the assets and financial terms remain undisclosed.
888 expects this deal to conclude in stages, with completion anticipated by the fourth quarter of this year, pending necessary regulatory approvals.
888’s strategic evaluation revealed that its gross profit margin in the US lagged behind its overall performance, attributed to the high costs of operating in a competitive market with stringent regulatory demands and formidable incumbents.
This led to the decision to initiate a controlled exit from its US B2C ventures, aiming to shut down these operations by year’s end, contingent on regulatory consent.
The exit strategy is expected to benefit 888 significantly, with a projected annual increase in adjusted EBITDA of around £25 million from 2025, despite facing initial net cash outflows of approximately £40 million due to the exit process, including a brand license termination fee.
888’s departure from the US market also involves ending its affiliations with Authentic Brands Group and the Sports Illustrated brand, a move that encompasses withdrawing from all current operations across several states.
The company plans to pay a termination fee totaling $50 million to Authentic Brands Group, spread over several years.
Furthermore, 888 has announced a major rebranding initiative, proposing to change its name to Evoke, subject to shareholder approval.
This rebranding aims to better reflect its diversified portfolio and marks a “new chapter” for the company, according to CEO Per Widerström.
Alongside this, 888 revealed its latest financial results, showing significant improvement in revenue and adjusted EBITDA, although the performance was still considered “disappointing” by the CFO Sean Wilkins.
As part of its strategic overhaul, 888 is launching a Value Creation Plan (VCP) aimed at resetting its operating model and achieving additional annual cost savings of £30 million.
The plan includes simplifying market approaches, enhancing operational efficiency, and adopting a more disciplined capital allocation strategy, with the goal of reducing leverage and improving profitability in the coming years.