After its first agreement to buy Playtech’s Italian unit in September, FanDuel owner Flutter Entertainment has completed acquiring Snaitech S.p.A., an Italy-based omnichannel betting and gaming operator. The acquisition, announced Wednesday, was completed for a cash consideration under an enterprise value of €2.3 billion.
Key Takeaways
- The deal boosts Flutter’s projected online market share in Italy to roughly 30%.
- Cost and revenue synergies are expected through technology integration and operational efficiencies over three years.
The inclusion of Snaitech (Snai) in Flutter's portfolio enhances the company's foothold in Italy. The group even considered applying for an Italian lottery license prior to the completion of Snai’s acquisition. This represents a growth opportunity for Flutter, especially with Snai possessing a strong retail network, all the more significant given Italy's strict advertising prohibitions on gambling services.
The company said in a statement that by leveraging Snai's retail network, Flutter aims to strengthen its leadership position in the market and grow its share of Italian net gaming revenues to a projected 30%.
Snaitech will be part of Flutter's International division within the Southern Europe and Africa segment.
Snai is one of the most recognized betting brands in Italy. Its acquisition is expected to provide access to new and diversified customer acquisition channels, both in retail and digital.
Flutter is looking for material cost synergies from the transaction. The group targets cost savings of at least €70 million on operating costs in three years for an investment of 1.25 times the cost, and on capital expenditure of around €10 million in savings.
Proprietary technology to drive growth
Additional revenue synergies are also anticipated with the "Flutter Edge" rollout, which involves a set of proprietary technologies and operational expertise, including next-generation pricing and risk management abilities, proprietary iGaming solutions, and increased user experience offerings.
These products are expected to add value to Snai's customer base proposition and deliver greater profitability.
The acquisition was financed through a new bridge credit facility supported by a syndicate of banking partners. Flutter had previously stated its intention to finance through an amended and restated commitment letter, which is now evidenced in the form of a definitive bridge credit agreement. The facility is for €2.5 billion of senior secured first-lien term loans.
Fully drawn on Tuesday, the facility will mature in one year with two possible six-month extensions. It carries an interest rate of the EURIBOR benchmark plus a 1.25% margin, with step-up increments over the loan term.
The proceeds of this bridge facility will fund the acquisition, refinance certain existing debt, and pay related fees and expenses. Some may also be used for general corporate purposes and working capital needs throughout the Flutter group.
Flutter will provide further financial details and updated guidance when it announces first-quarter results on May 7.
