Flutter wants Snaitech
Flutter Entertainment is in discussions over a potential £2bn ($2.5bn) deal to buy Playtech’s consumer arm, Snaitech. Playtech confirmed on August 14 that the two businesses were negotiating terms and that a period of exclusivity had been granted to finalize the deal.
Snaitech is the largest gambling company in Italy by market share, and posted increased revenue in 2023 of €946.6m ($1.04bn), a 5.2% boost from the previous year.
the rumored price could value Snaitech at a premium to the entire market capitalization of Playtech
A potential deal had been rumored between the two companies in 2022, though it failed to materialize after a significant increase in revenue for Snaitech. The rumored price could value Snaitech at a premium to the entire market capitalization of Playtech and would leave the latter as a purely B2B-focused company.
Huge Q2 results posted
The news comes as Flutter posted impressive Q2 results, raising its full-year fiscal guidance after earning revenue of $3.6bn, up 20% from Q2 2023.
The strong performance bucked overall market trends, although rival Entain had also recently posted better-than-expected results for Q2 after a tumultuous period in recent months.
the US arm of the business showed particular strength
Flutter’s net income rose to $297m, a huge 364% increase from the equivalent period of the previous year. The results were also driven by a 17% increase in average monthly players to 14.3 million. The US arm of the business showed particular strength, with FanDuel maintaining its dominant position in the sports betting market.
Flutter’s stock price initially jumped more than 12% to over £165 ($222) per share on the news. Playtech stock was also up after news broke about the Snaitech negotiations, to over 652p ($8.37) per share, an increase of over 20%.
Flutter continuing acquisitions
Flutter has been aggressively targeting acquisitions since the 2018 appointment of its current CEO, Peter Jackson, with Snaitech the latest in a series of deals. The company had already acquired the Italian betting company Sisal for a similar price in 2021.
And the move may not be the only major acquisition lined up for 2024. This week, Flutter was also rumored to be mulling over a $1bn move for Brazilian operator Betnacional, which has a 7% market share in the South American country.
Announcing the results, Jackson mentioned Brazil specifically, stating: “We will work out what we want to do in Brazil and when we’ve made a decision, we’ll let the market know.“
“I think we’re reasonably well placed with our Betfair brand in that market. And of course, we also operate PokerStars out there as well. We are ambitious, right? We like to have podium positions. And I really would like to have gold medal positions.”