Playtech agrees to transfer ownership of Snaitech to Flutter Entertainment for a sum of $2.3 billion.
Playtech Transfers Italian Subsidiary Snaitech to Flutter Entertainment for €2.3 Billion
Sources have confirmed that prominent gambling company, Flutter Entertainment, has sealed a deal with Playtech to acquire its Italian subsidiary, Snaitech.
As per the statement released on their official website, this acquisition aligns with Flutter's plan to boost its presence in global markets. The deal is set to be finalized by the second quarter of 2025. Shareholders of the listed industry titan can anticipate a positive impact on share value immediately.
Snaitech: A Heavyweight in the Italian Gambling Sector
Not new to the European gambling scene, Snaitech (also known as Snai) was brought under Playtech's umbrella in 2018. In 2023, it ranked as the third-largest player in Italy's online gambling and sports betting market with a share of 9.9% (291,000 monthly users). With over 2,000 physical outlets, Snai has also carved out a significant retail niche, holding a market share of 19% in betting and 14% in gambling. Financially, the company has been thriving. According to Flutter's statement, revenue and adjusted EBITDA have recorded a 26% and 32% year-on-year growth respectively over the last four years (2019-2023). Revenue in 2023 was €947 million, half of which came from the online sector.
"I am thrilled to announce the acquisition of Snai, a leading entity in Italy, the largest regulated market in Europe. This deal is advantageous from both a strategic and financial standpoint. It fits perfectly into our strategy for worthwhile mergers and acquisitions and presents a substantial opportunity to boost Snai's growth by offering access to Flutter's market-leading products and capabilities in the US and globally. I am eager to welcome the Snai team into the Flutter group and work together to optimize the growth prospects for our combined businesses."–Peter Jackson, CEO of Flutter Entertainment, Flutter Entertainment*
Shareholders Enjoy the Benefits
Flutter aims to strengthen its position in the Italian market through the acquisition of Snaitech and aims to claim the top spot with an online market share of around 30%. This also includes Flutter's existing partnership with the Sisal brand, which has witnessed robust growth recently. Flutter expects €70 million in synergies from the integration of technology and content. Additional revenue growth will be fueled by the utilization of Flutter Edge, the global competitive advantage of the brand in areas like talent, technology, product, and capital. These synergies are expected to be exploited in the initial years following the deal's completion and will provide additional value to shareholders.
Italy is Europe's largest regulated gambling market, with an estimated gross gaming revenue (GGR) of €21 billion in 2023. Although the online segment still represents a small portion with a 21% share, strong growth is predicted in the coming years due to increasing digital penetration. Flutter intends to capitalize on this trend and further enhance its market leadership.
Deal yet to be Officially Approved
The acquisition of Snaitech by Flutter Entertainment is currently subject to approval from competition authorities and is expected to be completed by the second quarter of 2025. Although Flutter's financial obligations will temporarily rise due to the acquisition, the company plans to minimize this by capitalizing on future growth opportunities. Flutter maintains its medium-term leverage target of 2.0-2.5x and will provide further insights into its future growth strategy at an upcoming investor day in September 2024.
Flutter's acquisition of Snaitech marks a significant achievement in its recent run. Just a week ago, the company announced its acquisition of a 56% stake in NSX Group, a prominent Brazilian sports betting provider.Betnacional, one of the most influential providers on the recently regulated Brazilian sports betting market, is also a part of this deal.
This acquisition by Flutter Entertainment will likely increase their visibility in the global news, as they look to boost their presence in various markets. (News)
The acquisition of Snaitech by Flutter Entertainment is expected to positively impact shareholders due to increased revenue and potential market dominance. (News)
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