Playtech agrees €2.3bn sale of Snaitech to Flutter Entertainment

Playtech has agreed a deal to sell its Snaitech betting and gaming business in Italy to Flutter Entertainment.

The €2.3 billion transaction values Snaitech at 9x FY2023 Adjusted EBITDA and will enable Playtech to return up to €1.8 billion to shareholders.

The transaction will also enable Playtech to focus on its technology-led offering in high-growth B2B gambling markets.

“Under the Playtech Group’s ownership, Snaitech has grown into a high-quality business with a leading position in the Italian sports betting and gaming market,” said Mor Weizer, chief executive of Playtech. 

“The business has an experienced and high-performing management team that has fully embraced the post-lockdown shift to omni-channel in Italy. Today, Snaitech has an established retail presence and online business that are both well-placed to continue their success in one of the most attractive markets in Europe.

“While Snaitech has been an important part of the Playtech Group’s growth in recent years, the Board agreed that this transaction represents a compelling opportunity to maximise value for our shareholders while also allowing them to share in further upside from continued ownership of a leading B2B business,” Weizer added.

“The combination of the Playtech Group’s leading technology with its exposure to attractive markets, including in the Americas and Europe, provides a strong platform for growth in the medium-term. We are excited about what the future holds and the many opportunities ahead of us.”

In addition to the shareholder distribution, Playtech plans to use some of the proceeds from the sale to repay amounts outstanding on its €350 million bond due March 2026, and to finance incentives of up to €100 million for members of Playtech’s senior team, including the chief executive.

The incentive program is subject to shareholder approval and already has the support of shareholders representing 34.38 per cent of the issued share capital of the company.

A separate cash bonus pool of €34 million will be paid to the Snaitech senior management team, of which chief executive Fabio Schiavolin will be the largest participant.

The acquisition of Snaitech by Flutter Entertainment is expected to complete by the second quarter of 2025, subject to relevant antitrust, gaming and other regulatory approvals.

Playtech acquired Snaitech in 2018 for €846 million and has built it into one of the leading Italian B2C sports betting and gaming companies in online and retail. 

In 2023, Snaitech generated revenue of €946.6 million and adjusted EBITDA of €256.1 million.

Peter Jackson, chief executive of Flutter Entertainment, commented: “I am delighted to announce the acquisition of Snai, one of the leading players in Italy, Europe's largest regulated market. This transaction is compelling strategically and financially. 

“It fits perfectly within our strategy for value creating M&A and creates a significant opportunity to accelerate Snai's growth by providing them with access to Flutter's market leading products and capabilities both in the US and globally.

“I look forward to welcoming the Snai team to the Flutter Group and working with them to maximize the growth opportunity for our combined businesses,” Jackson concluded.

The acquisition is expected to deliver operating cost synergies of at least €70 million to Flutter through integration of technology, content and third-party procurement, alongside revenue synergies from providing Snai with access to Flutter’s capabilities across pricing and risk management, in-house casino content and technology platforms.

The transaction should be immediately accretive to Flutter's earnings and will boost the company's overall share of the online gambling market in Italy to around 30 per cent in combination with its existing Italian businesses Sisal, PokerStars, Betfair and Tombola.

Shares in Playtech plc. (LSE:PTEC) were trading 1.59 per cent higher in London Tuesday morning at 766.00 pence per share. Shares in Flutter Entertainment plc. (NYSE:FLUT) closed 1.30 per cent higher at $224.34 per share in New York Monday, prior to this morning's announcement.