Flutter Entertainment Buys Italian Gambling Giant Sisal in Latest Acquisition
Paddy Power and Betfair owners Flutter Entertainment have struck a deal to purchase Italy’s largest gambling company Sisal in a €1.91bn deal.
The business is being bought from private equity company CVC Capital, and the new deal will see Flutter’s shares increase in the country by 20%. Sisal is expected to pocket a cool £211m during 2022, 50% of profits are accounted for by online gamblers and the remainder from retail outlets and lottery.
Second Largest Regulated Market
Regulator ADM and consultancy MDF Partners admitted Italy was the second largest regulated country in the gambling market following the UK creating gross revenues of 19bn. Although only 10% of revenue was generated online, MDF Partners forecast the rapid growth in the market and estimate the annual growth will rise to 18% to €3.6bn in 2024.
Flutter’s Chief Executive Peter Jackson said, “For some time, we have wanted to pursue this market opportunity via an omnichannel strategy and this acquisition will ideally position us to do so.”
Refinanced Debt
The payment to Sisal will be made in cash with any additional debt arranged through Barclays. Although in June Flutter’s net debt reached £2.68bn, they made the decision to sell off its Oddschecker business for £135m, refinancing its debt, and lowering funding costs.
Flutter is confident in the forecast figures for additional earnings in the first 12 months of the acquisition, Flutter continues with its US operations, and further down the line will pay dividends once the debt level reaches between 1 and 2 times earnings.
Currently, Sisal employs nearly 2,500 people with on average 300,000 online players per month and 9.5m retail customers. The Italian company’s focus is the gaming and betting services including Totip, Totocalcio, and SuperEnoalotto. Sisal’s retail business will be bolstered by Flutter brands PokerStars and Betfair, while the casino arm of the company will benefit from Flutter’s in-house gaming content.
