FanDuel owner Flutter Entertainment strikes $2.6 billion deal to buy Italy's Snaitech

Dow Jones09-17

MW FanDuel owner Flutter Entertainment strikes $2.6 billion deal to buy Italy's Snaitech

By Louis Goss

FanDuel owner Flutter Entertainment has reached an agreement to acquire one of Italy's largest gambling companies, Snaitech, for EUR2.3 billion ($2.6 billion) in cash.

The Dublin headquartered company - which owns brands including Betfair, Paddy Power, and PokerStars - said the acquisition sits in line with its push to grow its international footprint that has seen it snap up businesses in the U.S., Brazil, and Serbia in recent years.

If completed, the acquisition will see Flutter Entertainment become Italy's largest gambling company following its EUR1.9 billion acquisition of the European country's top gaming firm Sisal in 2022.

Snaitech, which is a subsidiary of Isle of Man headquartered gambling technology company Playtech, operates over 1,600 betting shops across Italy and offers various online and mobile poker and casino games.

Flutter Entertainment's (UK:FLTR) London listed shares increased 1% on Tuesday having gained 22% in the year-to-date. The Irish firm's New York listed shares $(FLUT)$ were also up 1% in Tuesday's pre market session having advanced 25% in 2024 so far.

Shares in Snaitech's parent company Playtech (UK:PTEC), listed on the London Stock Exchange, fell 2% on Tuesday having surged 65% in the year-to-date.

Flutter Entertainment, which in 2023 saw its revenue increase 25% on the back of its FanDuel acquisition, said its acquisition of Snaitech will help it make EUR70 million worth of cost savings inside its Italian unit through integration of technology, content, and third-party procurement.

Italy is currently Europe's largest regulated gambling market, with an estimated gross gambling revenue $(GGR)$ - a key industry metric - worth EUR21 billion in 2023, of which just 21% was generated through online gambling.

Snaitech currently controls a 9.9% share of Italy's gambling market, which saw it generate EUR947 million in revenue and EUR256 million in adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the financial year 2023, of which 50% was made online.

The Irish company, which switched its primary listing from London to New York in May, said its acquisition of Snaitech would also strengthen its position as a "local hero" in the Italian market due to Snaitech's strong brand recognition.

"This transaction... fits perfectly within our strategy for value creating M&A and creates a significant opportunity to accelerate Snai's growth by providing them with access to Flutter's market leading products and capabilities both in the US and globally," Flutter CEO Peter Jackson said.

Flutter Entertainment's deal comes just days after the Irish company acquired a 56% stake in Brazil's NSX Group for $350 million on Sept. 13 in a takeover aimed at giving it a foothold in Brazil's $3 billion GGR gaming market.

Flutter Entertainment was formed through a merger between Dublin headquartered Paddy Power and London headquartered Betfair in 2016.

-Louis Goss

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(END) Dow Jones Newswires

September 17, 2024 04:22 ET (08:22 GMT)

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