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Deyan Dimitrov June 13, 2023 3 min read
888 Concludes Paf Deal, Divesting Its Latvian Properties
The group plans to reinvest the extra funds in its core profitable markets, focusing on long-term profitability
888 Holdings maintains its consolidation strategy, aiming to streamline operations and concentrate on strategic growth. The sale of its Latvian assets should allow the company to allocate resources more effectively. On the other hand, Paf regards the takeover as a long-term investment, cementing its position in the Baltic nation.
The Deal Aligns with 888’s Restructuring Efforts
FY22 provided some vital insights for 888, causing the group to reevaluate its priorities and shift its focus towards optimizing its global portfolio. While the Latvian market has shown promise, 888 Holdings determined that divesting these assets would allow the company to prioritize its resources and concentrate on jurisdictions with higher growth potential and more robust regulatory frameworks.
The deal with Paf was first announced in May 2023, encompassing 888’s MrGreen.LV and WilliamHill.LV subsidiaries. 888 executive chair Lord Mendelsohn noted that the sale would generate significant short-term proceeds from a non-core market which could be diverted to more profitable jurisdictions, streamlining the company’s assets.
The sale of the Latvian business marks another positive step in the execution of our integration program.Lord Mendelsohn, 888 executive chair
Paf agreed to pay 888 €28.3 million ($30.6 million) for the two domains. In addition to reinvestment opportunities, the influx of capital will alleviate the group’s significant debt and play a vital part in its deleveraging efforts. Overall, the move is a natural step towards 888’s plans to decrease costs, slim down operations, and enhance profitability.
Paf Maintains Its Growth Ambitions
The sale can be seen as a win-win for both parties as it significantly expands Paf’s footprint in the Latvian market. The acquisition aligns with Paf’s expansion-minded strategy as the Åland Islands-based operator pursues continued European growth through strategic acquisitions and partnerships. The company’s new assets should enable enhanced gaming experiences for Latvian players, strengthening its regional foothold.
Paf will initially leave its two new purchases relatively unchanged and allow them to operate under their current names. The transition should remain unnoticed by customers, who will continue to enjoy the same level of service. Paf CEO Christer Fahlstedt noted that the Latvian market presented significant long-term opportunities, justifying the purchase.
This is a good long-term investment… We have been operating in Latvia since 2018 and we aim to build a stable market presence.Christer Fahlstedt, Paf CEO
The sale of 888 Holdings’ Latvian properties to Paf signifies the two companies’ diverging priorities. While 888 focuses on reducing costs and focusing on its most profitable businesses, Paf remains set on seizing new opportunities. Such differences ensure that the transaction will benefit both operators, enhancing the overall gaming landscape.