888 Holdings to sell its Latvian operations for £25m
William Hill owner 888 agrees to sell its Latvian business to Finnish games console maker for £25m
- Paf Consulting will pay 888 Holdings £20.9m upfront and up to £3.7m next year
- For Paf, the deal makes it the third largest online gambling company in Latvia
888 Holdings has agreed to sell its Latvian operations for around £25m as owner William Hill narrows its focus on its largest territories.
Paf Consulting, a manufacturer and distributor of games consoles based in Finland’s Aland Islands, will buy the division for an estimated €28.25 million (£24.6 million).
The transaction includes a £20.9 million down payment and up to £3.7 million in further payouts next year when the 2023 financial statements are finalized.
Transaction: William Hill’s owner 888 Holdings has agreed to sell its Latvian company for around £24.6 million to Paf Consulting, a manufacturer and distributor of games consoles
Completion of the sale is expected sometime in the coming weeks, after the Latvian subsidiary has paid a dividend and been included in Paf’s contracts.
Gibraltar-based 888 said the deal would not affect its “ongoing operations and synergy program” and allows it to prioritize its “core and growth markets”, which include the UK, Spain and Italy.
The acquisition will make Paf the third largest online gambling company in Latvia, where it has been operating for five years.
Christer Fahlstedt, CEO of Paf, commented: ‘We are delighted to have the opportunity to build on a great Latvian success story.
“With a long-term perspective, we are convinced that the Latvian market is moving towards more player protection and is therefore an excellent strategic match for Paf.”
The rise of 888 in Latvia followed the acquisition of William Hill’s European arm of casino giant Caesars Entertainment last July for £1.95 billion.
Shortly before the deal was completed, William Hill had rebranded Latvian sports betting and internet casino operator 11.lv, taking control of the company after acquiring online gambling group Mr Green three years earlier.
Lord Mendelsohn, Executive Chairman of 888, said: ‘We are constantly reviewing our asset base to ensure we only hold assets that contribute to our long-term strategy and maximize value for our shareholders.
“Our relatively limited exposure to the Baltic region means that the region is not one of our core or growth markets where we prioritize our investments.”
888 Holdings shares were up 1.3 percent Monday afternoon to 78 pence, but are down nearly 60 percent over the past 12 months.
In 2022, 888 plummeted to a pre-tax loss of £115.7 million due to debt charges related to the William Hill takeover and total revenue fell as the easing of Covid-19 restrictions meant people were gambling less online.
The group has also been hit by scandals about not putting proper money laundering controls in place and putting necessary checks on new customers, including whether they were at risk of gambling-related harm.
An investigation revealed that a customer was able to place a £100,000 bet immediately, even though this was above their credit limit and a 24-hour period is required between receiving requests for a credit limit increase and the assign it.
The UK Gambling Commission considered suspending the company’s operating license but instead imposed a record fine of £19.2 million.