Flutter Entertainment on Wednesday completed the acquisition of Snaitech S.p.A., one of Italy’s leading omnichannel operators from a subsidiary of Playtech for cash consideration based on an enterprise value of €2.3 billion ($2.6 billion).
The acquisition of Snai, which will be positioned within the Southern Europe & Africa region of Flutter’s international division, aligns with the company’s strategy of investing in leadership positions in international markets.
“I am delighted to welcome Snai, one of the leading gaming brands in Italy, to the group,” Flutter CEO Peter Jackson said in a statement. “Snai’s significant omnichannel presence brings strategically important assets to enhance Flutter’s position in Italy.
“The transaction fits perfectly with our strategy for value creating M&A and is expected to bring about significant growth opportunities for Snai by providing access to Flutter’s market leading products and capabilities. It is with great excitement we can now start working with Snai to implement our robust integration plans and begin to realize the compelling benefits of this combination.”
Flutter said the acquisition will create shareholder value through:
- Adding an enhanced position in Italy, Europe’s largest regulated market which has significant online growth potential because of comparatively low online penetration rates. Advertising restrictions also increase the strategic importance of Snai’s retail presence. Adding Snai to the Flutter portfolio will increase Flutter’s online market share in Italy to about 30%.
- Enhancing Flutter’s local hero brand portfolio. Snai has a strong base of engaged omnichannel customers along with recognizable brands that are expected to expand and diversify customer acquisition opportunities for Flutter in Italy.
- Delivering meaningful value creation, through access to the Flutter Edge, with target operating cost synergies of at least €70m, to be achieved within three years of closing at a cost of 1.25x and capex synergies at €10 million. Revenue synergies are expected to be achieved by leveraging Flutter Edge capabilities across pricing and risk management, in-house igaming content and other Flutter technology to enhance the experience offered to Snai’s customers.
The transaction has been completed using debt facilities previously disclosed. Flutter entered into an amended and restated commitment letter with banks to get binding commitments in respect of a senior secured first lien term loan comprising an aggregate Euro principal of €2.5 billion to pay for the Snai acquisition.
On April 29, Flutter and certain of its subsidiaries converted the binding commitments into a definitive bridge credit agreement with the commitment parties to draw down the facility in full.
Flutter plans to use the facility to:
- Finance or refinance amounts payable in connection with the acquisition
- Finance or refinance certain indebtedness as the company may elect
- Pay fees and/or expenses in connection with the foregoing
- Finance general corporate purposes and working capital of the group
The facility will mature April 29, 2026, with two additional six-month extension options and bear interest at a per annum rate equal to EURIBOR plus an applicable margin equal to 1.25%, which is subject to certain step-ups over the term of the facility.
The other terms of the Bridge Credit Agreement are substantially similar to the terms of the Term Loan A, Term Loan B, and a revolving credit facility agreement dated November 24, 2023, and as amended from time to time, entered into between, amongst others, Flutter and J.P. Morgan SE as administrative agent.
Flutter expects leverage to increase but then reduce given the highly visible profitable growth opportunities that exist across the group and remains committed to its medium-term leverage ratio of 2.-2.5x.
Flutter will provide an update, including financial guidance, as part of its first-quarter results on May 7.
