Flutter Entertainment (NYSE: FLUT; LSE: FLTR) has announced the completion of its acquisition of an initial 56% stake in NSX Group ("NSX"), a prominent Brazilian operator of the BetNacional brand. The transaction was finalized for a cash consideration of approximately $350 million. This strategic move is in line with Flutter's aim to invest in leading positions in attractive international markets, with a focus on creating shareholder value.
By acquiring NSX, Flutter is set to strengthen its competitive position in the rapidly growing Brazilian market. With a population of over 200 million, Brazil presents an attractive landscape for online sports betting and iGaming, particularly with soccer being a key part of its culture. NSX, having rapidly grown to become the fourth-largest operator in Brazil by 2023, will augment Flutter's existing Betfair business, providing a podium position in the country.
The acquisition of NSX is expected to yield significant revenue synergies for Flutter. The company anticipates that the deal will result in an additional $220 million in revenues and an adjusted EBITDA loss of $70 million in 2025, to be reported within the international reporting segment. This underscores Flutter's commitment to driving market share growth and embedding future profitability through disciplined customer investment.
Peter Jackson, CEO of Flutter Entertainment, expressed his enthusiasm for the acquisition, emphasizing the value it brings to the company. He highlighted the strategic fit of NSX's local expertise, combined with Flutter's existing Brazilian business and the advantages of the Flutter Edge, as a compelling opportunity to capitalize on the promising growth prospects in Brazil.
The transaction agreement involved Flutter paying cash consideration of approximately $350 million and contributing its existing Betfair Brazil business in exchange for a 56% stake in the newly combined Flutter Brazil business. Additionally, mechanisms have been established to enable Flutter to potentially increase its shareholding through reciprocal put/call arrangements in year five and year ten following completion.
While the acquisition is expected to lead to an increase in leverage, Flutter remains committed to its medium-term leverage ratio of 2.0-2.5x, reflecting its confidence in the highly visible profitable growth opportunities across the group.
As a result of these announcements, the company's shares have moved 2.57% on the market, and are now trading at a price of $248.05. Check out the company's full 8-K submission here.
