888 finalizes acquisition of Mandalay.
The UK-based online gaming firm 888 Holdings has recently purchased Mandalay, a business unit of the JPJ Group, for about €21 million. With the acquisition, 888 gains control of well-known bingo brands. Furthermore, 888 released impressive financial results for 2018.
Strengthening market position
888 publicly announced the Mandalay acquisition last month and has now finalized the deal. After paying JPJ's Jet Management Group and Jet Media GBP 12 million last September and an additional GBP 6 million in February, 888 now possesses the rights to Mandalay's bingo assets, including the Costa Bingo brand. Moving forward, 888 will manage the bingo business through its own B2B platform Dragonfish. According to CEO Itai Pazner, this acquisition will help 888 expand into regulated markets, particularly the UK bingo sector. Pazner added:
"We'll leverage our organic growth initiatives and Dragonfish, our world-class B2B platform, to consolidate these brands in our existing B2C portfolio. This will enable us to capitalize on synergies and accelerate growth in our core capabilities - product, marketing, and customer management."
JPJ also stands to gain from the transaction. The group's spokesperson said the sale would allow them to focus on their UK market and optimize their spending on marketing efforts. The statement likely refers to JackpotJoy's UK-successful brands.
Recent Expansions
The acquisition of Mandalay comes on the heels of 888's takeover of the Irish online betting provider, BetBright, worth GBP 15 million. Despite BetBright's recent announcement to shut down its business operations, 888 plans a "gradual market launch" of the BetBright platform, featuring poker, bingo, online casino, and sports betting.
London-based financial firm Regulus Partners, which has analyzed the industry, suggests two possible explanations for BetBright's closure: either it lost all business due to planned tax increases or a strategic realignment of the brand. The latter is more likely, given 888's growth strategy. Here, more information is yet to come.
Profitable 2018
888's growth strategies seem successful. The company, listed on the London Stock Exchange, released its 2018 financial results, boasting a record EBITDA of over GBP 80.8 million (~€94.7 million), a 6% increase from 2017. Although total revenue dropped by around 2%, pre-tax profit jumped 11% to over GBP 82 million (~€96.1 million).
888 credits the exceptional performance to substantial charges in 2017, leading to a decrease in both its B2C and B2B business. However, decreases in both divisions were countered by savings in various areas. Pazner stated:
"The solid 2018 results reflect our ongoing cost savings initiatives and improvements in the regulated markets, notably in Europe, where we saw strong growth in the online casino and sports betting segments."
Unfulfilled Potential
While 888 published positive numbers, industry analysts from Regulus Partners believe the company's full market potential is still untapped. They see 888 underperforming at the moment and remain curious if Pazner will fully exploit this potential in 2019 as promised.Pazner outlined 888's impressive performance and plans moving forward:
"Our market potential is far from being fully exploited, and we're optimistic about continuing this positive momentum. Mandalay and BetBright are significant strategic steps. We've experienced a 10% increase in average daily turnovers from Q4 2018 to Q1 2019 with the hope that the Board of Directors will continue harnessing 888's technological prowess and strategic progress."
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Source: www.onlinecasinosdeutschland.com
