Dual-listed Flutter Entertainment PLC (FLUT) (GB:FLTR) today announced that it has agreed to acquire Italian gaming operator Snaitech S.p.A. from a subsidiary of Playtech PLC (GB:PTEC). The deal is valued at $2.6 billion (€2.3 billion) in cash. Flutter stated that this acquisition perfectly aligns with its strategy to strengthen its leadership positions in global markets like Italy. Flutter shares in London fell 0.43% as of writing. Meanwhile, the stock gained 1.3% in pre-market trading on the NYSE.
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Flutter Entertainment is a sports betting and gaming company with brands such as Paddy Power, PokerStars, and Betfair. It earns most of its profits from the U.S. and moved its primary listing to the NYSE in May 2024.
Flutter Expands with Snaitech Acquisition
Flutter believes this deal supports its strategy for valuable mergers and acquisitions and is a great fit for the company in strategic and financial terms.
In FY23, Snaitech, which trades as Snai, generated fully regulated revenue of €947 million (after gaming duties) and adjusted EBITDA of €256 million. Around 50% of its earnings came from online operations. Moreover, Snai’s strong retail presence, with over 2,000 locations, gives it the second-largest retail market share.
As a result, the deal is expected to give Flutter a roughly 30% share of the online market in Italy when combined with its existing Italian operations. Also, the deal will provide efficiency benefits in a key region, as Italy is Europe’s largest gambling market.
According to the terms of the deal, Playtech will distribute a special dividend of €1.7 billion to €1.8 billion upon the completion of the transaction. The acquisition is expected to be finalized by the second quarter of next year and will boost earnings per share (EPS) immediately.
Are Flutter Shares a Good Buy?
According to TipRanks, FLTR stock has received a Strong Buy consensus rating based on 13 Buy and three Hold recommendations. The Flutter share price target is 19,178.29p, which is 12.98% above the current level.
