Flutter Entertainment PLC Announces Acquisition of NSX Group

NEW YORK / ACCESSWIRE / September 13, 2024 / Flutter Entertainment (NYSE:FLUT)(LSE:FLTR) ("Flutter"), the world's leading online sports betting and iGaming operator today announces the acquisition of an initial 56% stake in NSX Group ("NSX"), a leading Brazilian operator of the Betnacional brand for cash consideration of approximately $350m ¹ .

The transaction fully aligns withFlutter'sstrategy to invest in leadership positions in international markets, securing a podium position for Flutter on completion in the regulating and fast-growing Brazilian market. NSX is the number 4 operator in Brazil ² , with a portfolio of brands which include the flagship Betnacional brand. On a standalone basis, NSX is expected to generate revenue of approximately $256mand Adjusted EBITDA of approximately $34m in 2024 ³ .

Under the transaction agreement, on completion, Flutter will (i) pay cash consideration of approximately $350m ¹ and (ii) contribute its existing Betfair Brazil business, in return for a 56% stake in the newly combined Flutter Brazil business. In addition, a mechanism has been put in place to enable Flutter to increase its shareholding through reciprocal put/call arrangements in year five and year ten following the completion date ⁴ .

This is a compelling acquisition, in line with Flutter's strategy and is expected to create shareholder value as follows:

1.Delivers an enhanced competitive position in a fast growing, newly regulated market :

• Brazil is due to fully regulate its online sports betting and iGaming market in early 2025 and has a number of highly attractive characteristics:

  • A population of over 200 million, with sports, and soccer in particular, being a key part of Brazilian culture

  • Strong demand for sports betting and iGaming products with compound annual gross gaming revenue (GGR) growth in the unregulated market of 38% since 2018, to almost $3bn in 2023 ²

• The majority of growth and market share gains have been delivered by locally focused brands

• Consolidation in the fully regulated market from early 2025 is expected to benefit established, local operators, due to the associated tax, licensing and compliance costs

• The strength of the combined Flutter Brazil business will position it exceptionally well to capitalize on the opportunity in this attractive market

2.Enhances our "local hero" brand portfolio with: