888 Holdings Looking to Go Big in M&A, Says CEO Pazner

Posted on: September 2, 2021, 10:35h. 

Last updated on: September 2, 2021, 02:30h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Count Israel’s 888 Holdings among the companies looking to participate in gaming industry consolidation in a big way.

888 mergers
888 CEO Itai Pazner seen in an interview earlier. He says his company is interested in mergers and acquisitions. (Image: CNBC)

In an investor presentation released yesterday, the gaming company highlights “strategically attractive mergers and acquisitions” as one of its top strategic priorities. CEO Itai Pazner confirmed in an interview that the operator could be on the prowl for deals.

We feel that we are in a good position to take part in significant M&A activities, and we’re ready to look and assess any opportunity that comes our way,” he said.

888 was founded in 1997. It previously gained exposure to the US via an agreement with the Delaware Lottery, and by running the World Series of Poker’s online platform for Caesars Entertainment.

However, the Israeli company is pivoting towards sports wagering, recently striking an agreement with Sports Illustrated owner Authentic Brands Group (ABG) to use the venerable sports journal’s name on sportsbooks.

Where 888 Could Go Shopping

Gibraltar-based 888, which trades in London, has a market capitalization of about $2.1 billion, putting it in the small-cap territory.

However, that’s not preventing the operator from being attached to some consolidation rumors of significance. For example, 888 is widely viewed as one of the three leading contenders for William Hill’s international assets. Caesars Entertainment (NASDAQ:CZR) is in the process of auctioning those businesses and is expected to announce a winning bidder in the fourth quarter.

If 888 is successful in winning those assets, it would bolster the operator’s already significant European footprint. In the first half of 2021, the UK, Italy, and Spain combined for 62 percent of the operator’s revenue, according to the investor presentation.

In the US, the SI Sportsbook just launched in Colorado, and 888 said it will be in Indiana, Iowa, and New Jersey over the next several months. The company is aiming to be in 15 states by 2024, and command at least a five percent share in each of those locations.

Pazner didn’t comment on specific companies in the US or elsewhere that are on 888’s shopping list. The company has an acquisitive history, making two acquisitions in 2019. With many operators opting for small, bolt-on deals, 888 could opt to go that route rather than making a big, costly splash.

Hunted Becomes Hunter

Earlier this year, 888 was rumored to be a possible target for Las Vegas Sands (NYSE:LVS), which lacks online gaming and sports wagering exposure. But it’s been seven months since that speculation appeared, with nothing in the way of follow-up.

Owing to its market value and other larger players expressing interest in acquisitions, 888 makes for a logical target in takeover talks. But chatter to that effect is non-existent since the LVS rumor surfaced.

888 is licensed in Gibraltar and the UK, and also holds permits in Spain, Italy, Romania, Denmark, Nevada, and New Jersey, according to its website.