888 plans European M&A push with $100m war chest

888 is assessing M&A targets following a record year of growth that saw an extra $100m in cash added to its balance sheet. The London-listed operator enjoyed a landmark 2020, reporting a 52% overall revenue rise driven by double-digit growth in all key verticals and operating markets. In an exclusive interview with EGR, 888 CEO Itai Pazner discussed the group’s aim of building on its organic growth with external acquisitions. He said: “Organically, we’re planning to grow in all verticals, but if I have to pin down the focus on where we’re planning to grow, the US is one strategic area and sports betting is another. “In terms of M&A, at the moment there aren’t the attractive M&A opportunities in the US that we are looking for, so we are looking elsewhere. We’re looking mainly in our core markets in Europe,” he added. 888 is free to focus on M&A following the integration of all products onto in-house proprietary technology, including the Poker8, Orbit casino and 888 Spectate sports betting platform. “We now own all the technology behind our products, including sports betting, and we’ve got marketing which is working extremely well, as evidenced by our strong growth in all key markets. The fact we’ve had a successful migration process has made us very confident,” Pazner explained. “We’re confident that we’re ready to take on more non-organic business growth and integrate it into our platform, which has led us to look at opportunities to do that, most of which are based in our core markets in Europe,” he added. 888 is planning to launch its Spectate sports betting platform in the US in 2021 as the firm looks to make up ground on more established players including DraftKings, BetMGM and FanDuel. However, Pazner downplayed the importance of making significant strides in the US over the coming year, suggesting the firm has a wider, long-term strategy for the market. “I don’t believe in the whole concept of make or break, I believe in taking things step-by-step and making these opportunities work for us,” he explained. “We do have a lot of things that we’re launching this year, so I do think we’ll make a step change this year in the US, but even if it is unsuccessful, then we’ll continue into next year. “Our plan in the US is a three-year plan. We want to launch in multiple states, to come up with our new infrastructure and to support the successful B2B deal that we have with Caesars. “We have a very clear three-year plan in place, and it could be that one year we’ll progress more than the next, which is what usually happens. “I’ll obviously be happy to be pleasantly surprised about this year, but this year is one step in a bigger plan,” Pazner concluded. 888’s growth story in the last year has led to glowing Buy recommendations from investment banks including Berenberg, Peel Hunt and JP Morgan. As a result, the firm has been mooted as a potential takeover target for US operators, many of which are seeking out technology-focused European partners. For his part, Pazner declined to comment on the speculation. He said: “First of all, I have no control over this, it’s a matter for our board of directors. If 888 is a target for any US or any other European operator, it’s outside of our control. “Obviously, I think we’re a great company, we have great assets, and therefore I think we’re an attractive company that I’d like to buy if I was on the other side of the fence. “However, we’re focusing on growing the business and reaching our strategic objectives, and that’s our full and sole focus at the moment. “There’s a lot of growth opportunities for us in each of our operational areas and we’re focusing on that,” he concluded.