Flutter entertainment is the world’s leading online sports betting and iGaming operator. It recently announces the purchase of an initial 56% stake in NSX Group. NSX is a leading Brazilian operator of the Betnacional brand for cash consideration of estimated $350 million.
The transaction fully aligns with the strategy of Flutter to invest in leadership positions in international markets. It secures a podium position for Flutter on completion in the regulating and fast-growing Brazilian market. NSX has a portfolio of brands which include the flagship Betnacional brand. In Brazil, it is the number 4 operator. Analysts expect NSX to generate an estimated $256 million in standalone revenue. Moreover, adjusted EBITDA of roughly $34 million this year.
On completion under the transaction agreement, Flutter will pay cash consideration of about $350 million as well as contributing its existing Betfair Brazil business in return for a 56% stake in the newly combined Flutter Brazil business. Additionally, Flutter has established a mechanism that allows it to increase its shareholding through reciprocal put or call arrangements in the fifth and tenth years following the completion date.
In line with the strategy of Flutter, this is a compelling purchase. Analysts expect it to create shareholder value. This will be achieved by delivering an enhanced competitive position in a fast-growing, nearly regulated market. The company will enhance its local hero brand portfolio. It will also present a compelling opportunity to drive synergies through access to the Flutter Edge. Ultimately, this will lead to meaningful value creation.
The CEO, Peter Jackson commented how he is excited to announce the addition of NSX, operator of Betnacional a leading Brazilian sports betting and iGaming brand, to the Flutter portfolio.
He believes that combining the extensive local expertise of the NSX team with their existing Betfair business and the power of the Flutter Edge will create a compelling opportunity. This combination aims to capitalize on the growth potential in Brazil, which offers an exciting runway for future growth.
