Flutter is buying the No. 3 operator in the Italian sports betting market, Snaitech, for $2.3 billion.
The purchase will be both cash and debt free, according to Tuesday‘s release. The transaction is not entirely out of the blue, given Snaitech’s owner Playtech confirmed media speculation in August surrounding a potential sale to the parent company of FanDuel.
Flutter’s US stock rose 2.8% to $230.55 at Tuesday’s close. More information on the purchase will be given at Flutter’s investor day in New York next Wednesday.
“I am delighted to announce the acquisition of Snai, one of the leading players in Italy, Europe’s largest regulated market,” Flutter CEO Peter Jackson said. “This transaction is compelling strategically and financially. It 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.”
Why buy Snai?
Flutter outlined three key points to why the purchase makes sense:
- Strengthen its position in the Italian sports betting market
- Optimize operations through synergies with existing Sisal business
- Improve shareholder value with another EBITDA-driving business
Flutter noted that once the at least €70 million in cost savings are accounted for, the deal is at a “similarly attractive multiple” to the Sisal purchase it made in December 2021. Year one will see 10% of those synergies, with year two realizing about 50%.
“[The Snaitech purchase] is also comfortably above our internal returns criteria by year two,” the release said.
Flutter boosts growing Italian business
Flutter will take the top position in the Italian sports betting market once the deal closes, it said, with about a 30% online market share. It will utilize both the Sisal and Snai brands.
Snai had 9.9% of market share in 2023 with 291,000 average monthly players. Adjusted EBITDA hit €256 million, half of which came from online, off €947 million in revenue last year.
Online gaming revenue accounted for 21% of total Italian market revenue last year. That is low compared to some of the more mature international, Flutter noted, with online’s share in the UK and Australia above 60%.
Snai also has a high brand awareness at 74%, third-highest in an Italian market that has ad restrictions. Flutter’s Sisal is the most-recognized brand.
