888 Holdings plc has announced what it characterises as a milestone in its future US growth following the acquisition by its US subsidiary 888 US Inc., of the remaining 53 percent interest in AAPN Holdings LLC that 888 US does not already own, from its joint venture partner Avenue OLG Entertainment LLC and other minority shareholders of AAPN for US $28 million.
The AAPN joint venture was established between Avenue and 888 in March 2013 to launch 888’s B2C brands in the regulated online gaming market in the United States. Since November 2013, the 888poker and 888casino brands have been operating in New Jersey.
The transaction will give 888 independent control of its growth strategy in the US moving forward, a 888 statement advised Tuesday. The strategy includes signing new partnerships and continuing to deploy its proprietary products and technology (both B2B and B2C) in new states as they regulate. Over recent months, 888 has also further strengthened its position in the US by:
* In September launching 888sport in New Jersey alongside its established poker and casino brands, marking the first time that 888 has offered sports betting in the United States and paving the way for the Group to launch 888sport in additional US states as future regulation allows; and
* Signing a landmark sponsorship agreement with the New York Jets of the National Football League (“NFL”), marking the first such agreement between an NFL team and a pure-play online gaming operator.
Itai Frieberger, Chief Executive of 888 commented:
“The acquisition of the remaining stake in AAPN is an important strategic step towards 888 achieving its exciting long-term potential in the US.
“Taking outright ownership of AAPN gives 888 additional operational, technological and commercial flexibility to develop innovative and exciting new partnerships and launch in new states – through both B2B and B2C channels – as and when future regulation allows. “This acquisition places 888 in an even better position to take advantage of the significant growth opportunities in the US and create additional value for our shareholders.
“The AAPN joint venture has been a very successful endeavour for the Group. It has afforded us the flexibility and financial capability to build a position in the regulated US market over the last five years whilst also investing in other global regulated markets. I would like to thank Avenue Capital for being fantastic partners in this venture since 2013.”
The consideration of US $28 million will be satisfied all in cash, with US $10 million being paid to the sellers on or about the date of this announcement and the remainder of US $18 million to be paid by 31 March 2019.