888 offloads B2C assets in US to Hard Rock Digital

Caught in the midst of a rebranding move, 888 Holdings is taking a further hard look at what it wants to achieve. Short and medium-turn profitability is on the company’s mind, and a previous suggestion that the company may exit the United States’s business-to-consumer market is now proving true as the company confirmed in a statement that it is unloading its assets to Hard Rock Digital.

The move will help the company to further streamline its operations, achieve immediate savings as it exits the highly competitive US B2C ecosystem, and seek to strengthen its focus on core markets, among which are the United Kingdom and Denmark and leave the rather more pressing ones behind. Shedding brand partnerships just a few weeks ago, 888 has put speculation to rest and is executing what is its value-rebuilding plan.

The sale of assets will happen by the end of Q4 2024 in stages, but the deal will of course be subject to the customary regulatory approvals before it can be realized. According to the company, the exit from the US B2C vertical should allow the company to benefit from Adjusted EBITDA of around £25m starting in 2025.

888 will also have £10m in savings to reinvest in markets and activities that could further boost its financial performance and continue to create value for the company. With financial targets not completely in the doldrums, 888 is now on a good foothold to continue bringing value.

However, 888 will have to absorb a one-off cost of £40m tied to the company’s exit, among which are brand license termination fees that have already taken place, all the while the company is transitioning to evoke plc.

Under the guidance of this new brand, 888 will execute its value creation plan (VCP) which seeks to strengthen financial performance and enable the company to return to profitability. A huge focus will be on the aforementioned core markets, along with Spain and Italy, which together with Denmark and the United Kingdom contribute 80% of the group’s revenue.

Yet, 888 is not going to give up exploring opportunities in other competitive markets that can lead to commercial success for the group. The FY2023 downturn and change in leadership has only galvanized 888 to act promptly and start rebuilding its brand. To show how confident the company is about its future, 888 has reportedly rebuffed at least one buyout offer over the past months.

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