Flutter Acquires Snaitech for €2.3bn to Bolster European Presence

Flutter Entertainment Acquires Snaitech for €2.3 Billion: A Strategic Move to Expand European Presence

In a landmark deal, Flutter Entertainment has acquired Italian gaming and sports betting operator Snaitech from Playtech for a staggering €2.3 billion ($2.56 billion). This sale marks a major strategic pivot for both companies, allowing Playtech to focus on its core B2B markets while Flutter strengthens its European foothold. Explore how this acquisition fits into Flutter’s broader strategy and why Playtech is doubling down on its business-to-business operations. Read on to understand the implications of this high-stakes transaction in the rapidly evolving gaming landscape.

Playtech has agreed to sell its Italian subsidiary, Snaitech, to Flutter Entertainment for a total enterprise value of €2.3 billion, making this one of the most significant deals in the gaming industry this year. This acquisition will significantly bolster Flutter’s position in Europe, adding to its recent strategic moves, including the acquisition of Brazil’s NSX Group. For Playtech, the sale represents a lucrative return on its initial investment, reinforcing its decision to refocus on its B2B business operations across the Americas and Europe.

A Strategic Exit for Playtech

Playtech’s decision to sell Snaitech comes as part of its broader strategy to concentrate on its core B2B businesses in growing markets. Acquired by Playtech in 2018 for €846 million ($941.45 million), Snaitech has grown significantly under Playtech’s ownership. Snaitech’s adjusted EBITDA nearly doubled from €136 million in 2017 to €256 million in 2023, reflecting the success of Playtech’s strategic guidance in expanding Snaitech’s online market share and strengthening its retail footprint in Italy.

The sale price of £6.27 ($8.28) per share represents a 16.5% premium over Playtech’s previous share price of £5.38 ($7.11). This impressive return is nearly three times Playtech’s initial investment, with the transaction valued at 9x Snaitech’s EBITDA for 2023. As part of the transaction, Playtech has announced plans to return £1.7-£1.8 billion to shareholders through a special dividend, translating to between £4.56 and £4.83 per share—a payout that exceeds Playtech’s share price at the start of 2024.

Playtech CEO Mor Weizer commented on the deal, stating, “The sale of Snaitech reflects our strategic intent to streamline Playtech’s portfolio and focus on our core B2B business. This move strengthens our balance sheet, enhances our capital returns to shareholders, and positions us to seize new opportunities in the Americas and Europe.”

Flutter’s Strategic Expansion in Europe

For Flutter Entertainment, the acquisition of Snaitech is a strategic move that not only enhances its existing operations in Italy but also aligns with its broader goal of expanding its global footprint. Flutter’s portfolio in Italy already includes lottery firm Sisal, and the addition of Snaitech will further solidify its presence in one of Europe’s most lucrative gaming markets.

This acquisition follows Flutter’s recent purchase of NSX Group in Brazil, showcasing its aggressive strategy to secure leadership positions in key regulated markets. The Snaitech acquisition fits seamlessly into Flutter’s growth narrative, providing it with an immediate boost in market share and operational capabilities within Italy’s highly competitive gaming environment.

Flutter CEO Peter Jackson expressed enthusiasm about the deal, noting, “The addition of Snaitech not only strengthens our market position in Italy but also complements our recent strategic investments in high-growth regions. This acquisition is a testament to our commitment to expanding our presence in regulated markets and enhancing our offering with well-established brands.”

Implications for the Gaming Industry

The deal signals a major shift in the competitive landscape of the European gaming market. By acquiring Snaitech, Flutter gains a robust, profitable business with a significant online and retail presence in Italy. The transaction also reflects a broader trend of consolidation in the industry, as major players seek to expand their reach and diversify their portfolios in regulated markets.

Share prices for both Playtech and Flutter have remained steady in the immediate aftermath of the announcement, underscoring investor confidence in the strategic rationale behind the acquisition. For Playtech, the divestment of Snaitech provides a substantial cash infusion, allowing it to intensify its focus on B2B opportunities, particularly in emerging markets across the Americas.

The sale of Snaitech to Flutter Entertainment marks a pivotal moment for both companies, aligning with their respective strategic goals. Playtech’s exit allows it to concentrate on its B2B growth strategy, while Flutter’s acquisition strengthens its competitive position in Europe’s gaming landscape. As the industry continues to evolve, this transaction underscores the importance of strategic alignment and market presence in securing long-term success in the global gaming sector.