Flutter bets on Italian gambling market with $2.6 bln Snaitech deal
Second deal in a week for Flutter
Acquisition to boost Flutter's earnings per share immediately
Flutter to lift online market share in Italy to around 30%
Adds Flutter executive quotes in paragraphs 4-6, 8 and 10
By DhanushVignesh Babu and Padraic Halpin
Sept 17 (Reuters) -Flutter FLTRF.L said on Tuesday it would buy Italy's Snaitech for 2.3 billion euros ($2.6 billion) including debt from gambling technology group Playtech PTEC.L, cementing its leading position in Europe's largest gambling market.
The deal is to close by the second quarter of 2025 and will add to earnings per share immediately for Flutter, the world's largest gambling company.
It will also see Italy's third largest gambling company change hands and leave Playtech to focus on its operations as a business-to-business software provider.
Flutter highlighted the opportunity Italy presents, where just 21% of gross gaming revenue is bet online compared to over 60% in more mature markets like the UK and Australia.
Greater digital adoption is expected to drive online market growth at a compound rate of around 10% over the next three years, Flutter cited research from Regulus Partners as saying.
"It could be (faster). If you look at what happened during COVID, there really was an acceleration in online adoption and that happened whilst the retail market remained very resilient," Dan Taylor, the head of Flutter's international division, told Reuters.
It marks the second deal in a week for Flutter, which announced last Friday it would buy a 56% stake in Brazil's NSX Group, the operator of Betnacional, for about $350 million to expand in the soon-to-be regulated Brazilian market.
The move comes as Flutter, which has seen an influx of new customers and revenue from the booming U.S. market, continues its aggressive international expansion.
The Irish betting group expects its leverage ratio to grow from 2.6 times following the deal but then reduce rapidly given its forecasts for profit growth in the United States. This gives it the firepower for more deals in the long run, Taylor said.
The Snai acquisition will strengthen its standing in Italy, giving it an online market share of about 30% when combined with its strongly performing Sisal brand, the online market leader Flutter bought in 2022.
Flutter will keep both brands, similar to its strategy in the UK where it operates Paddy Power, Betfair and Sky Bet.
Other positive market dynamics in Italy include a relatively high spend per adult as a percentage of GDP, a growing share of online revenue from mobile devices and regulatory stability, Berenberg wrote in August.
Shares in Playtech closed 5.2% lower having risen sharply on Monday, while Flutter's UK-listed shares gained 3.3%, reaching their highest level since March.
($1 = 0.8988 euros)
Reporting by DhanushVignesh Babu, Yadarisa Shabong in Bengaluru, Alberto Chiumento in Gdansk and Padraic Halpin in Dublin; Editing by Keith Weir, David Evans and Mark Potter
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