The Gaming Innovation Group (GiG) is nearing the conclusion of its acquisition of an 80% stake in 888Africa, representing a pivotal move for the company. According to GiG's CFO, Phil Richards, this purchase signals an unexpected return to the business-to-consumer (B2C) sector, yet it is expected to enhance GiG’s earnings immediately and strengthen its presence in the African market.
In September, GiG Software plc revealed plans to acquire an 80% stake in Evoke’s 888Africa in a deal valued at up to €16.4 million ($19.1 million). To finance the acquisition, GiG aims to raise €2.5 million through a targeted share issue and an additional €6 million via convertible debt. This acquisition comes after GiG transitioned entirely to a B2B model in 2023.
Richards anticipates that the deal will finalize by the end of September, granting GiG a “profitable, cash-generative B2C operator” and access to several of Africa’s rapidly growing regulated markets. Additionally, he describes it as a “strategic bridgehead” for GiG’s core B2B operations.
“The dual value is really the point of the deal,” he elaborates. “Owning a leading local operator provides us direct insights into regulatory trends, player behaviors, and payment frameworks within various African markets, insights that are typically challenging to obtain externally.
“We believe this local knowledge and presence will eventually facilitate conversations with other operators considering entering or expanding within Africa, similar to how our previous B2C engagements in Europe informed our platform offering there.”
Questions arise regarding GiG's motives for returning to B2C, particularly after its exit from the sector in 2023 when it restructured into separate media and platform divisions, ultimately rebranding the former as Gentoo Media.
Richards cautions against over-interpreting the acquisition as a full-scale return to B2C, reiterating that GiG still fundamentally operates as a B2B technology provider. The decision to re-enter B2C was motivated by three primary factors, according to Richards.
“First, our internal priorities have evolved,” he explains. “We have clearly stated that we’re moving from a growth-at-all-costs approach to a disciplined focus on profitability and cash flow; 888Africa delivers immediate benefits on both fronts.
“Second, the opportunity was time-sensitive. 888Africa became available due to Evoke's strategic evolution, and opportunities of this caliber are rare.
“Third, the African market has progressed significantly, with regulatory, technological, and demographic factors fostering sustainable growth.”
Analyst Hjalmar Ahlberg from Redeye posits that GiG's decision to acquire 888Africa and re-enter the B2C arena may partially stem from challenges within its B2B sector.
“It started off promising after the new management and spin-off, and they appeared to have a solid customer pipeline,” he remarks. “However, some of those projections relied on certain sweepstakes operators, and the market conditions for those have become more uncertain.
