REG - FlutterEntertainment - Flutter announces completion of NSX acquisition

Flutter EntertainmentAnnouncement

15/05/2025 07:00

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RNS Number : 7235I  Flutter Entertainment PLC  15 May 2025

 

Flutter Entertainment announces completion of NSX acquisition

New York, May 14 2025: Flutter Entertainment (NYSE: FLUT; LSE: FLTR)
("Flutter") the world's leading online sports betting and iGaming operator
today announces that it has completed 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 aligns with Flutter's strategy to invest in leadership
positions in attractive international markets and is expected to create
shareholder value through:

 ·             Delivering an enhanced competitive position in the newly regulated and fast
               growing(2) Brazilian market. The Brazilian online sports betting and iGaming
               market has highly attractive characteristics, including a population of over
               200 million, with sports, and soccer in particular, being a key part of its
               culture
 ·             Enhancing our "local hero" brand portfolio through the addition of rapidly
               growing, local brands to our existing Betfair business, creating a podium
               position in Brazil. NSX entered the market in 2021, rapidly growing to be the
               number 4 operator by 2023(2).
 ·             A compelling synergy opportunity through access to the Flutter Edge, and
               delivering meaningful value creation. Revenue synergies are expected to be
               achieved by providing NSX access to Flutter proprietary pricing and risk
               management capabilities to deliver a differentiated sportsbook product
               offering. This is in addition to the sharing of Flutter iGaming expertise and
               content to enhance the iGaming experience

In line with our successful strategy in other newly regulated markets, we
expect to drive market share growth and embed future profitability through
disciplined customer investment. We expect that the acquisition of NSX will
contribute $220m additional revenues and an adjusted EBITDA loss of $70m(4,5)
in 2025, reported within the International reporting segment.

Peter Jackson, CEO, commented:

"I am delighted to welcome NSX - the operator of leading Brazilian sports
betting and iGaming brand, Betnacional - to the Flutter portfolio. The
transaction demonstrates Flutter's powerful optionality as an 'and' business
and aligns perfectly with our strategy for value creating M&A. The
combination of NSX's extensive local expertise, alongside our existing
Brazilian business and the advantages of the Flutter Edge, creates a
compelling opportunity to capitalize on the exciting runway of future growth
in Brazil."

Under the transaction agreement, on completion, Flutter has (i) paid cash
consideration of approximately $350m(1) and (ii) contributed 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 completion(3).

The transaction is consistent with our strategy and is another example of
Flutter allocating capital to drive shareholder value creation. We expect
leverage to increase but then reduce given the highly visible profitable
growth opportunities that exist across the Group and we remain committed to
our medium-term leverage ratio of 2.0-2.5x(4,5,6,7).

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements reflect
our current expectations as to future events based on certain assumptions and
include any statement that does not directly relate to any historical or
current fact. In some cases, you can identify these forward-looking statements
by the use of words such as "outlook", "believe(s)", "expect(s)", "potential",
"continue(s)", "may", "will", "should", "could", "would", "seek(s)",
"predict(s)", "intend(s)", "trends", "plan(s)", "estimate(s)", "anticipates",
"projection", "goal", "target", "aspire", "will likely result", and or the
negative version of these words or other comparable words of a future or
forward-looking nature. Such forward-looking statements are subject to various
risks and uncertainties and there are or will be important factors that could
cause actual outcomes or results to differ materially from those indicated in
these statements. The ability to predict results or actual effects of our
plans and strategies is inherently uncertain. Accordingly, actual results may
differ materially from those expressed in, or implied by, the forward-looking
statements. In addition, the ability to achieve estimated cost synergies in
the timeframe described in this press release, or at all, is subject to
various assumptions, which involve risks and uncertainties. In addition, we
may incur additional or unexpected costs in connection with the matters
discussed in this press release. The ability to predict results or actual
effects of our plans and strategies is inherently uncertain. Accordingly,
actual results may differ materially from those expressed in, or implied by,
the forward-looking statements.

Factors that could cause Flutter's results to differ materially from those
described in the forward-looking statements can be found in Part I, "Item 1A.
Risk Factors" of Flutter's Annual Report on Form 10-K for the fiscal year
ended December 31, 2024 as filed with the Securities and Exchange Commission
(the "SEC") and other periodic filings with the SEC, which are accessible on
the SEC's website at www.sec.gov. Flutter undertakes no obligation to publicly
update or review any forward-looking statement, whether as a result of new
information, future developments or otherwise, except as required by law.

About Flutter Entertainment plc

Flutter is the world's leading online sports betting and iGaming operator,
with a market leading position in the US and across the world. Our ambition is
to leverage our size and our challenger mindset to change our industry for the
better. By Changing the Game, we believe we can deliver long-term growth while
promoting a positive, sustainable future for all our stakeholders. We are
well-placed to do so through the distinctive, global advantages of the Flutter
Edge, which gives our brands access to group-wide benefits, as well as our
clear vision for sustainability through our Positive Impact Plan.

Flutter operates a diverse portfolio of leading online sports betting and
iGaming brands including FanDuel, Sky Betting & Gaming, Sportsbet,
PokerStars, Paddy Power, Sisal, Snai, tombola, Betfair, MaxBet, Junglee Games
and Adjarabet. We are the industry leader with $14,048m of revenue globally
for fiscal 2024, up 19% YoY, and $3,665m of revenue globally for the quarter
ended March 31, 2025.

To learn more about Flutter, please visit our website at www.flutter.com
(http://www.flutter.com) .

Contacts:

 Investor Relations:                                                             Media Relations:
 Paul Tymms, Investor Relations                                                  Kate Delahunty, Corporate Communications
 Ciara O'Mullane, Investor Relations                                             Lindsay Dunford, Corporate Communications
 Chris Hancox, Investor Relations                                                Rob Allen, Corporate Communications
 Email: investor.relations@flutter.com (mailto:investor.relations@flutter.com)   Email: corporatecomms@flutter.com (mailto:corporatecomms@flutter.com)

 

 

 

Notes:

 1.  Represents cash payment of R$1,961m at USD:BRL: 5.61 subject to completion
     accounts and other adjustments
 2.  Total Brazilian online sports betting and iGaming market compound annual gross
     gaming revenue (GGR) growth of 38% since 2018, to almost $3bn in 2023. NSX
     total online sports betting and iGaming market share of 9% for the year ended
     31 December 2023. Source for market share and market growth based on Regulus
     partners and internal estimates
 3.  All future transactions will be undertaken at fair market value based on an
     agreed valuation or formal valuation by an independent valuer
 4.  Adjusted EBITDA, Net Debt and Leverage Ratio are non-GAAP financial measures.
     A reconciliation of our forward-looking non-GAAP financial measures to the
     most directly comparable GAAP financial measure cannot be provided without
     unreasonable effort. This is due to the inherent difficulty of accurately
     forecasting the occurrence and financial impact of the adjusting items
     necessary for such a reconciliation to be prepared of items that have not yet
     occurred, are out of our control, or cannot be reasonably predicted.
 5.  Adjusted EBITDA is defined as net income (loss) before income taxes; other
     income, net; interest expense, net; depreciation and amortization; transaction
     fees and associated costs; restructuring and integration costs; impairment of
     PPE and intangible assets and share based compensation expense
 6.  Net debt is defined as total debt, excluding premiums, discounts, and deferred
     financing expense, and the effect of foreign exchange that is economically
     hedged as a result of our cross-currency interest rate swaps reflecting the
     net cash outflow on maturity less cash and cash equivalents.
 7.  Leverage ratio is defined as net debt divided by Adjusted EBITDA

 

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