Ireland-based Flutter Entertainment is poised to significantly enhance its presence in the Italian gaming landscape through its strategic acquisition of omnichannel operator Snaitech, a subsidiary of gambling software titan Playtech. With an enterprise value of €2.3 billion in cash, the deal, structured on a cash-and-debt-free basis, translates to a competitive purchase price of £6.27 per share of Playtech.
According to announcements made earlier this week, this acquisition is a pivotal component of Flutter’s strategic initiative to bolster its growth across international markets. Set to finalize in the second quarter of 2025, pending the necessary regulatory approvals, this acquisition positions Flutter to claim what it describes as the 'gold medal position' within Italy's gaming sector.
Snaitech currently holds a 9.9% market share, making it the third-largest online operator in the country as of 2023. Importantly, this transaction is anticipated to enhance Flutter’s earnings per share (EPS) almost immediately, further cementing Flutter's standing in the competitive landscape of online sports betting. Peter Jackson, Flutter's Chief Executive Officer, hailed the acquisition, stating, "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 access to Flutter's market-leading products and capabilities both in the US and globally." The ramifications of this acquisition extend beyond strategic positioning; it is projected to yield substantial operating cost synergies for Flutter, estimated at a minimum of €70 million, attainable through the integration of their existing technology, content, and procurement processes over the next three years.
Additionally, Flutter anticipates capital expenditure synergies amounting to €10 million, further enhancing its financial robustness. Furthermore, the sale holds significant implications for Playtech shareholders. Following the completion of this transaction, Playtech aims to distribute a special dividend of between €1.7 billion and €1.8 billion, which signals a robust return on investment.
The proceeds from the sale will also be strategically allocated to repay a substantial portion of its outstanding €350 million bond maturing in March 2026. In relation to shareholder returns, Playtech plans to reward its senior management team with up to €100 million in bonus awards and create a cash bonus pool of €34 million for Snaitech’s senior management.
Additionally, a comprehensive transformation initiative is in the pipeline, designed to deliver further significant cash returns to shareholders over time. In market response, Flutter's shares experienced a nearly 1% increase, reflecting positive investor sentiment, whereas Playtech’s shares dipped by approximately 3% amid morning trading, indicative of market reactions to this monumental deal and its far-reaching implications in the gambling sector..