888 sells gaming business in Latvia to Paf

888 Holdings is exiting the Latvian gaming market following a deal to sell its business to Paf.

The Åland-based operator will pay an initial €24 million to acquire 888’s Latvian business, which is comprised of the locally-licensed William Hill and Mr Green brands.

Paf will pay €24 million upon completion to acquire 888’s 90 per cent shareholding in the Latvian business, and a further earn-out of up to €4.25 million in 2024, subject to the performance of the business this year.

Paf will also gain a limited time license to use the William Hill and Mr Green brands in Latvia.

The Latvian business operates on a separate technology platform with its own management team, and generated net revenue of €9.1 million and EBITDA of £2.5 million in 2022.

“We continually review our asset base to ensure that we are only holding assets that both contribute to our long-term strategy and will maximise value for our shareholders. As a business, our relatively limited exposure in the Baltic region means that the region is not one of our core or growth markets where we prioritise our investments,” said Lord Mendelsohn, executive chair of 888.

“The Latvian business is a high-quality, locally regulated business, with an excellent team that has built a strong market position. I would like to express my sincere thanks to the team for their dedication during their time with the Group and I am highly confident that under new ownership with Paf, the business will continue to flourish.”

The transaction is expected to complete in the coming weeks, subject to the carve out of the Latvian subsidiary from the group’s supplier contracts and incorporation of the Latvian subsidiary into Paf’s contracts, as well as certain change of control consents and the payment of a dividend by the Latvian subsidiary.

“We are thrilled to get the opportunity to continue to build on a great Latvian success story,” said Christer Fahlstedt, CEO of Paf. “With a long-term perspective, we are convinced that the Latvian market is moving in the direction of increased player protection and thereby a great strategic fit for Paf.”

Tekkorp Capital acted as financial adviser to 888 in the transaction.

Janis Tregers, co-founder and head of the Latvia board commented: “We launched in 2012 as 11.lv, and in 10 years, have built a market-leading position in Latvia, with over 10 per cent market share. In 2018, we sold 75 per cent of the business to Mr Green at an enterprise value of €3.7 million, and this transaction to sell the entire business for a valuation of up to €28 million reflects the hard work of our team across the business resulting in significant value creation. 

“Under the new ownership with Paf, I am confident that the business will continue to go from strength to strength, delivering great products and experiences for our customers.”

Shares in 888 Holdings plc. (LSE:888) were trading 0.23 per cent higher at 77.18 pence per share in London Monday morning.