Flutter Entertainment PLC Announces Acquisition of NSX Group
Flutter Entertainment has announced the acquisition of a 56% stake in NSX Group, a leading Brazilian operator of the Betnacional brand, for approximately $350 million. This strategic move aligns with Flutter's goal to secure leadership positions in international markets, particularly in the fast-growing Brazilian market. NSX, currently the fourth-largest operator in Brazil, is expected to generate revenue of about $256 million and Adjusted EBITDA of $34 million in 2024.
The deal combines NSX with Flutter's existing Betfair Brazil business, creating a strong competitive position in the soon-to-be-regulated Brazilian market. Flutter sees this as a compelling opportunity to drive synergies through its proprietary technologies and expertise, potentially leading to significant market share growth and future profitability.
Flutter Entertainment ha annunciato l'acquisizione di una partecipazione del 56% nel NSX Group, un importante operatore brasiliano del marchio Betnacional, per circa 350 milioni di dollari. Questa mossa strategica è in linea con l'obiettivo di Flutter di garantirsi posizioni di leadership nei mercati internazionali, in particolare nel mercato brasiliano in rapida crescita. NSX, attualmente il quarto operatore in Brasile, si prevede genererà ricavi per circa 256 milioni di dollari e un EBITDA rettificato di 34 milioni di dollari nel 2024.
Il contratto combina NSX con l'attività già esistente di Flutter in Betfair Brasile, creando una posizione competitiva solida nel mercato brasiliano, che sta per essere regolamentato. Flutter vede questa come un'opportunità interessante per generare sinergie attraverso le proprie tecnologie e competenze, con il potenziale di portare a una significativa crescita della quota di mercato e della redditività futura.
Flutter Entertainment ha anunciado la adquisición de una participación del 56% en NSX Group, un operador brasileño líder de la marca Betnacional, por aproximadamente 350 millones de dólares. Este movimiento estratégico se alinea con el objetivo de Flutter de asegurar posiciones de liderazgo en los mercados internacionales, especialmente en el mercado brasileño de rápida expansión. NSX, actualmente el cuarto operador en Brasil, se espera que genere ingresos de alrededor de 256 millones de dólares y un EBITDA ajustado de 34 millones de dólares en 2024.
El acuerdo combina NSX con el negocio existente de Flutter en Betfair Brasil, creando una sólida posición competitiva en el mercado brasileño, que pronto será regulado. Flutter considera esto como una oportunidad atractiva para impulsar sinergias a través de sus tecnologías y experiencia propias, lo que podría llevar a un crecimiento significativo de la cuota de mercado y a una rentabilidad futura.
플러터 엔터테인먼트는 NSX 그룹의 56% 지분을 약 3억 5천만 달러에 인수한다고 발표했습니다. 이 전략적 움직임은 플러터가 국제 시장에서, 특히 빠르게 성장하는 브라질 시장에서 리더십을 확보하려는 목표와 일치합니다. 현재 브라질에서 네 번째로 큰 운영자인 NSX는 2024년에 약 2억 5천6백만 달러의 수익과 3천4백만 달러의 조정 EBITDA를 발생시킬 것으로 예상됩니다.
이 계약은 NSX와 플러터의 기존 베트페어 브라질 사업을 결합하여 곧 규제가 예정된 브라질 시장에서 강력한 경쟁 우위를 창출합니다. 플러터는 이를 통해 자사의 고유 기술과 전문성을 통한 시너지 효과를 창출할 수 있는 매력적인 기회로 보고 있으며, 이는 상당한 시장 점유율 성장과 향후 수익성으로 이어질 수 있습니다.
Flutter Entertainment a annoncé l'acquisition d'une participation de 56% dans le NSX Group, un opérateur brésilien de premier plan de la marque Betnacional, pour environ 350 millions de dollars. Ce mouvement stratégique s'aligne avec l'objectif de Flutter de sécuriser des positions de leadership sur les marchés internationaux, en particulier sur le marché brésilien en forte croissance. NSX, actuellement le quatrième opérateur au Brésil, devrait générer des revenus d'environ 256 millions de dollars et un EBITDA ajusté de 34 millions de dollars en 2024.
L'accord combine NSX avec l'activité existante de Flutter dans Betfair Brésil, créant une solide position concurrentielle sur le marché brésilien, qui va bientôt être réglementé. Flutter voit cela comme une opportunité intéressante de générer des synergies grâce à ses technologies et son expertise propres, ce qui pourrait conduire à une croissance significative de la part de marché et à une rentabilité future.
Flutter Entertainment hat die Übernahme eines 56%-Anteils an der NSX Group, einem führenden brasilianischen Betreiber der Marke Betnacional, für etwa 350 Millionen Dollar angekündigt. Dieser strategische Schritt steht im Einklang mit Flutters Ziel, Führungspositionen in internationalen Märkten zu sichern, insbesondere im schnell wachsenden brasilianischen Markt. NSX, derzeit der viertgrößte Betreiber in Brasilien, wird voraussichtlich Einnahmen von etwa 256 Millionen Dollar und ein bereinigtes EBITDA von 34 Millionen Dollar im Jahr 2024 generieren.
Der Deal kombiniert NSX mit dem bestehenden Betfair-Geschäft von Flutter in Brasilien und schafft eine starke Wettbewerbsposition im bald regulierten brasilianischen Markt. Flutter betrachtet dies als eine überzeugende Gelegenheit, Synergien durch eigene Technologien und Fachkenntnisse zu schaffen, was zu einem erheblichen Wachstum des Marktanteils und zukünftigen Rentabilität führen könnte.
- Acquisition of 56% stake in NSX Group, securing a top position in the Brazilian market
- NSX expected to generate $256 million in revenue and $34 million in Adjusted EBITDA in 2024
- Combination with existing Betfair Brazil business to create a stronger competitive position
- Opportunity to leverage Flutter's proprietary technologies for enhanced product offerings
- Potential for significant market share growth in a fast-growing, newly regulating market
- Expected Flutter Brazil Adjusted EBITDA loss of $90-100 million in 2025 due to customer investment
- Completion of the transaction subject to regulatory clearances, expected by Q2 2025
- Potential integration challenges and execution risks in combining NSX with Betfair Brazil
Insights
Flutter's acquisition of NSX Group marks a strategic move into the Brazilian market, with significant potential for growth. The
Key financial points:
- NSX's projected 2024 revenue:
$256 million - NSX's expected 2024 Adjusted EBITDA:
$34 million - Betfair Brazil's forecast 2024 revenue:
$70 million
The Brazilian online betting market presents a compelling growth opportunity. With a population exceeding 200 million and a strong sports culture, Brazil has seen a
NSX's rapid ascent to the 4th largest operator with
The acquisition's timing is crucial, coming just before Brazil's full regulation of online sports betting and iGaming in early 2025. This strategic move allows Flutter to establish a strong presence before new regulatory frameworks are implemented.
Key legal considerations include:
- Compliance with upcoming licensing requirements
- Adaptation to new tax structures
- Navigating potential restrictions on foreign ownership
NEW YORK / ACCESSWIRE / September 13, 2024 / Flutter Entertainment (NYSE:FLUT)(LSE:FLTR) ("Flutter"), the world's leading online sports betting and iGaming operator today announces the acquisition of an initial
The transaction fully aligns withFlutter'sstrategy to invest in leadership positions in international markets, securing a podium position for Flutter on completion in the regulating and fast-growing Brazilian market. NSX is the number 4 operator in Brazil 2 , with a portfolio of brands which include the flagship Betnacional brand. On a standalone basis, NSX is expected to generate revenue of approximately
Under the transaction agreement, on completion, Flutter will (i) pay cash consideration of approximately
This is a compelling acquisition, in line with Flutter's strategy and is expected to create shareholder value as follows:
1.Delivers an enhanced competitive position in a fast growing, newly regulated market :
Brazil is due to fully regulate its online sports betting and iGaming market in early 2025 and has a number of highly attractive characteristics:
A population of over 200 million, with sports, and soccer in particular, being a key part of Brazilian culture
Strong demand for sports betting and iGaming products with compound annual gross gaming revenue (GGR) growth in the unregulated market of
38% since 2018, to almost$3b n in 2023 2
The majority of growth and market share gains have been delivered by locally focused brands
Consolidation in the fully regulated market from early 2025 is expected to benefit established, local operators, due to the associated tax, licensing and compliance costs
The strength of the combined Flutter Brazil business will position it exceptionally well to capitalize on the opportunity in this attractive market
2.Enhances our "local hero" brand portfolio with:
Addition of fast-growing, local brands to our existing Betfair business to create a podium position in Brazil
NSX entered the market in 2021, rapidly growing to be the number 4 operator (
12% of the sports betting market and9% share of the total online market 2 )Betfair Brazil also delivering strong growth with forecast revenue of approximately
$70m in 2024
A strong local management team enabling decision-making close to the customer, who will lead the combined Flutter Brazil business
A proprietary technology platform developed locally in Brazil enabling a fast-paced and agile product offering
3.Presents a compelling opportunity to drive synergies via access to the Flutter Edge, and deliver meaningful value creation:
Revenue synergies will be achieved by providing NSX access to Flutter proprietary pricing and risk management capabilities to deliver a differentiated sportsbook product offering. This is in addition to the sharing of Flutter iGaming expertise and content to enhance the iGaming experience
Flutter Brazil will be exceptionally well positioned to take full advantage of the significant growth opportunity in the newly regulating Brazilian market. In line with our successful strategy in other newly regulated markets such as the US, we expect to drive market share growth and embed future profitability through disciplined customer investment. This is expected to result in a Flutter Brazil Adjusted EBITDA loss of approximately
$90 -100m 5 in 2025
The transaction is consistent with our strategy and is another example of Flutter allocating capital to drive shareholder value creation. We remain committed to our medium-term leverage ratio of 2.0-2.5x 8,9 which allows for flexibility for us to pursue value-creating acquisitions such as NSX.
We will provide a further update at our Investor Day on September 25, where we expect to discuss Flutter's exciting organic growth and cash generation potential in the medium-term, together with the capital allocation opportunities that this will unlock.
Completion of the transaction is subject to customary regulatory clearances and is expected to close by Q2 2025.
Peter Jackson, CEO, commented:
"I am excited to announce the addition of NSX, operator of Betnacional a leading Brazilian sports betting and iGaming brand, to the Flutter portfolio.
We believe that combining the extensive local expertiseofthe NSX team, our existing Betfairbusinessand the power of the Flutter Edge, will create a compelling opportunity to capitalize on the growth opportunity in Brazil which presents an exciting runway of future growth."
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect our current expectations as to future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. In some cases, you can identify these forward-looking statements by the use of words such as "outlook", "believe(s)", "expect(s)", "potential", "continue(s)", "may", "will", "should", "could", "would", "seek(s)", "predict(s)", "intend(s)", "trends", "plan(s)", "estimate(s)", "anticipates", "projection", "goal", "target", "aspire", "will likely result", and or the negative version of these words or other comparable words of a future or forward-looking nature. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. Such factors include, among others: Flutter's ability to effectively compete in the global entertainment and gaming industries; Flutter's ability to retain existing customers and to successfully acquire new customers; Flutter's ability to develop new product offerings; Flutter's ability to successfully acquire and integrate new businesses; Flutter's ability to maintain relationships with third-parties; Flutter's ability to maintain its reputation; public sentiment towards online betting and iGaming generally; the potential impact of general economic conditions, including inflation, rising interest rates and instability in the banking system, on Flutter's liquidity, operations and personnel; Flutter's ability to obtain and maintain licenses with gaming authorities, adverse changes to the regulation of online betting and iGaming; the failure of additional jurisdictions to legalize and regulate online betting and iGaming; Flutter's ability to comply with complex, varied and evolving U.S. and international laws and regulations relating to its business; Flutter's ability to raise financing in the future; Flutter's success in retaining or recruiting officers, key employees or directors; litigation and the ability to adequately protect Flutter's intellectual property rights; the impact of data security breaches or cyber-attacks on Flutter's systems; and Flutter's ability to remediate material weaknesses in its internal control over financial reporting.In addition, the ability to achieve the synergies described in this press release, or at all, is subject to various assumptions, which involve risks and uncertainties. The ability to predict results or actual effects of our plans and strategies is inherently uncertain. Accordingly, actual results may differ materially from those expressed in, or implied by, the forward-looking statements.
Additional factors that could cause the Company's results to differ materially from those described in the forward-looking statements can be found in Part I, "Item 1A. Risk Factors" of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 as filed with the Securities and Exchange Commission (SEC) and other periodic filings with the SEC, which are accessible on the SEC's website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in the Company's filings with the SEC. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.
About Flutter Entertainment plc
Flutter is the world's leading online sports betting and iGaming operator, with a market leading position in the US and across the world. Our ambition is to leverage our size and our challenger mindset to change our industry for the better. By Changing the Game, we believe we can deliver long-term growth while promoting a positive, sustainable future for all our stakeholders. We are well-placed to do so through the distinctive, global advantages of the Flutter Edge, which gives our brands access to group-wide benefits, as well as our clear vision for sustainability through our Positive Impact Plan.
Flutter operates a diverse portfolio of leading online sports betting and iGaming brands including FanDuel, Sky Betting & Gaming, Sportsbet, PokerStars, Paddy Power, Sisal, tombola, Betfair, MaxBet, Junglee Games and Adjarabet. We are the industry leader with
Contacts:
Investor Relations: | Media Relations: |
Paul Tymms, Investor Relations | Kate Delahunty, Corporate Communications |
Ciara O'Mullane, Investor Relations | Rob Allen, Corporate Communications |
Liam Kealy, Investor Relations | Rupert Gowrley, Corporate Communications |
Email : investorrelations@flutter.com | Email: corporatecomms@flutter.com |
Notes
Represents cash payment of R
$1,981m at USD:BRL: 5.66 subject to completion accounts adjustmentsSource for market share and market growth based on Regulus partners and internal estimates. Total online share of
9% is for year ended 31 December 2023NSX revenue and Adjusted EBITDA 7 estimates for the twelve months ended 31 December 2024 are based on NSX internal reporting. This information may not fully align with Flutter's US GAAP accounting policies and reporting following completion of the transaction
All future transactions will be undertaken at fair market value based on an agreed valuation or formal valuation by an independent valuer
It is expected that PokerStars casino and sportsbook products in Brazil will be switched off from 1 January 2025 and will cost approximately
$10m in Adjusted EBITDA 7Adjusted EBITDA, Net Debt and Leverage Ratio are non-GAAP financial measures. A reconciliation of our forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measure cannot be provided without unreasonable effort. This is due to the inherent difficulty of accurately forecasting the occurrence and financial impact of the adjusting items necessary for such a reconciliation to be prepared of items that have not yet occurred, are out of our control, or cannot be reasonably predicted
Adjusted EBITDA is defined as net income (loss) before income taxes; other income, net; interest expense, net; depreciation and amortization; transaction fees and associated costs; restructuring and integration costs; impairment of PPE and intangible assets and share based compensation expense
Net debt is defined as total debt, excluding premiums, discounts, and deferred financing expense, and the effect of foreign exchange that is economically hedged as a result of our cross-currency interest rate swaps reflecting the net cash outflow on maturity less cash and cash equivalents
Leverage ratio is defined as net debt divided by Adjusted EBITDA
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
SOURCE: Flutter Entertainment PLC
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FAQ
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