888 has announced that it will be selling selected US B2C assets to Hard Rock Digital, concluding its strategic review of its stateside operations.
The group began a strategic review of its US B2C operations at the start of March, ending its partnership with Authentic Brands Group in the process, which had granted 888 the exclusive use of the Sports Illustrated brand for online betting and gaming.
At the time, 888 noted that it would consider all potential alternatives that can deliver value for the business, including the sale – in whole or in part – of the group’s US B2C business, the controlled exit of US B2C operations or other possible strategic transactions.
The completion of the sale with Hard Rock Digital is conditional upon, amongst other items, relevant regulatory approvals. It is expected that the disposal will be conducted in several phases, with completion expected in the fourth quarter of this year.
888 has begun a controlled exit of its remaining US B2C, and subject to regulatory approvals and process, it is expected to fully cease operations by the end of 2024.
The US B2C exit is expected to “realise a recurring annualised benefit to adjusted EBITDA of approximately £25m from 2025 onwards”, while approximately £10m of these savings will be reinvested into growth and value creation initiatives.
The group has already incorporated the combined net impact of the US B2C sale and exit into the financial targets announced earlier this week following the release of its full-year 2023 results.
Net one-off cash costs of approximately £40m are expected. Expenditure relating to the US exit will also be “inclusive of the brand licence termination fee already announced, with such payments occurring from 2024 until 2029”.
