888 to Acquire William Hill Assets Outside US from Caesars for $3B

Agreement includes more than 1,400 retail betting shops and access to 2 million active online customers in the UK.
888 to Acquire William Hill Assets Outside US from Caesars for $3B
September 10, 2021

Less than five months after completing its $4 billion acquisition of William Hill, Caesars Entertainment announced Thursday that it had reached an agreement to sell the non-US assets of William Hill to 888 Holdings for approximately $3 billion.

UK-based 888 confirmed the acquisition in a separate statement, adding that the deal “represents a transformational opportunity for 888 to significantly increase its scale, further diversify its product mix and accelerate the upward shift of its revenue growth profile.”

Specifically, 888, which is currently an online-only betting operator, touted the more than 1,400 retail betting shops that William Hill operates across the UK. William Hill also has about 2 million active online customers in the UK.

“William Hill is an iconic sports brand, making it the ideal complement to 888, one of the leading global online gaming brands,” said 888 CEO Itai Pazner. “Our strategies are also complementary, being digitally led, customer focused, and committed to player protection and raising industry standards around safer gambling.

“We are also excited about the opportunities that the retail business provides and see significant brand benefits to [an 888-William Hill combination] from its large estate.”

The deal is subject to customary shareholder and regulatory approval, in part because UK rules classify the acquisition as a “reverse takeover.” Caesars said it expects the deal will close in Q1 2022.

According to 888, its combination with William Hill is expected to deliver annual cost savings of at least $140 million. It added that on a pro forma basis, the combined company would have generated annual revenue of $2.5 billion in 2020, as well as adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $464 million that year.

Caesars said that after the repayment of debt and other working capital adjustments, it expects to receive about $1.2 billion in net proceeds from the sale.

Sale has been brewing for months

A deal where Caesars would sell its William Hill assets outside the US was not unexpected.

Last month, when Caesars announced that it would rebrand its William Hill sportsbook app in eight states as Caesars Sportsbook, it also stated its desire to sell its William Hill assets outside the US by the end of 2021.

That followed comments CEO Tom Reeg made during the company’s Q1 2021 earnings call in May, when he said Caesars would prioritize investment into sports betting in the US. Reeg also teased the upcoming sportsbook rebranding at that time.

It was unclear what the deal ultimately means for the William Hill brand in the US. While the brand was substantially diminished stateside with the sportsbook rebranding, it didn’t disappear altogether. Regulations in Illinois, Nevada and Washington, DC, require sports betting take place either at or near a retail location, so in those jurisdictions Caesars gave customers access to a new Caesars Sportsbook by William Hill app.

The Financial Times reported that Caesars will keep the William Hill brand in the US on a perpetual lease from 888. It also quoted Paul Leyland, an analyst at Regulus Partners, who called 888’s strategy “compelling” and added that “execution [of the deal] will be the big test, especially since neither company has a great M&A record.”

888 and The Rank Group, another UK-based gambling company, tried to acquire William Hill in 2016, but their efforts were rebuffed by William Hill.

To fund its acquisition, 888 said it obtained $2.9 billion in debt financing from JP Morgan, Morgan Stanley and Mediobanca. 888 said it also plans to raise about $692 million in gross proceeds from a share sale “to be undertaken at an appropriate time.”

Bloomberg had tweeted on September 3 that 888 was in competition with Apollo Global Management to land a winning bid for William Hill. The tweet also indicated that CVC Capital Partners had dropped out of the running.

William Hill’s European operations include the UK, Italy, Spain and the Nordic countries—Denmark, Finland, Iceland, Norway and Sweden. It also recently launched in Latin America. William Hill also operates the Mr. Green brand in Europe.

If you or someone you know has a gambling problem and wants help, call the Virginia Council on Problem Gambling (VACPG) helpline at 1-888-532-3500

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