Flutter Entertainment, a global leader in online sports betting and iGaming, has announced its agreement to acquire Snaitech S.p.A., one of Italy’s foremost omni-channel operators. The transaction, valued at an enterprise value of €2.3 billion, is set to reinforce Flutter’s strategic commitment to expanding its leadership across international markets. With the acquisition expected to close by the second quarter of 2025, Flutter anticipates that the merger will immediately be accretive to its earnings per share.
Snaitech’s market position and performance:
Snaitech, presently the third-ranking online operator in Italy, commands a notable 9.9% market share with an average of 291,000 monthly players. According to Flutter’s press release, the company has demonstrated robust growth over the past four fiscal years, with online revenue and Adjusted EBITDA increasing at compound rates of 26% and 32%, respectively. This growth is supported by a significant retail presence of over 2,000 sites, establishing Snaitech as a leader in both betting and gaming sectors within the retail domain.
Upon completion of the acquisition, Flutter will enhance its market share in Italy to approximately 30% online, combining its current operations with those of Snaitech. This consolidation is expected to yield considerable efficiency benefits and reinforce Flutter’s competitive position in a key market. The integration is projected to generate at least €70 million in operating cost synergies and additional revenue synergies through the ‘Flutter Edge’—a framework encompassing pricing, risk management, and proprietary technology platforms aimed at enhancing customer experiences.
The acquisition is contingent on customary merger control and regulatory clearances and aligns with Flutter’s broader strategy of investing in value-creating mergers and acquisitions. The company’s leverage ratio, as of June 30, 2024, was 2.6x, with a net debt of $5.5 billion. Following the transaction, Flutter anticipates a temporary increase in leverage, which is expected to decrease swiftly due to the profitable growth opportunities across the Group.
Future outlook and impact on the market:
Italy, as Europe’s largest regulated gambling market, offers substantial growth potential with relatively low online penetration at 21% of the market’s gross gaming revenue. Flutter’s acquisition of Snaitech is strategically placed to capitalize on the anticipated shift towards digital platforms, with the online gambling sector expected to grow at a compound rate of approximately 10% over the next three years.
As The Irish Times reports, Flutter CEO Peter Jackson expressed enthusiasm about the acquisition, noting, “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.”
As the deal progresses towards completion, Flutter Entertainment is set to discuss further details and its strategic plans during its upcoming Investor Day on September 25, highlighting the expected synergies and growth opportunities from this major acquisition.
