888 purchases JPJ bingo assets for £18m

888 has put pen to paper on an £18m deal to buy Jack Pot Joy’s (JPJ) Mandalay portfolio of online bingo brands. The deal includes Costa Bingo, City Bingo and Sing Bingo.

Handshake

The deal will total £18m, with £12m to be paid initially. © Pexels.

The bingo portfolio acquired by 888 makes up the Mandalay operating unit, so-called after Mandalay Media, the original owner before JPJ acquired them in 2014.

888 is to pay £12m in cash to close the deal, while the additional £6m is to paid in September 2019.

The brands acquired by 888 have until this point been run as B2B brands. However, upon completion of the deal, 888 will offer them as B2C.

JPJ Group aims to now focus on its core brands, saying that this deal would ensure they can focus on optimising returns on its investment of its single brand UK strategy.

An employee consultation is underway, and the deal is expected to be completed in March.

Shares in 888 rose slightly immediately following the announcement of the deal. 888 has already worked closely with the brands for the last decade, having supplied its Dragonfish bingo software platform to Mandalay.

Speaking about the deal, Itai Pazner, 888 CEO, said:

The group continues to deliver its stated strategy of expanding across global regulated markets. This expansion is underpinned by organic growth initiatives supported by exploring value-enhancing M&A. Having been developed on Dragonfish, the Group’s first-class B2B platform, we are confident that consolidating these brands into our existing B2C portfolio will deliver synergies and growth opportunities by applying the full extent of 888’s core capabilities in product, marketing and customer relationship management to their operations. Itai Pazner, CEO 888

Mandalay generated £11m in revenue and £3.7m in tax in the final quarter of 2018. However, the picture is not all rosey. Analysts have pointed out that the group has under-performed consistently in recent years. Revenue has dropped 24% per year since 2015, despite the bingo market being described by Regulus Partners as “relatively buoyant”.

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