Flutter Entertainment has completed the acquisition of an initial 56% stake in NSX Group, a leading Brazilian operator and owner of the Betnacional brand, for a cash consideration of approximately US$350 million.
Therefore, the transaction is in line with Flutter’s strategy of investing in leadership positions in attractive international markets and is expected to create value for shareholders through:
- Providing an enhanced competitive position in the newly regulated and rapidly growing Brazilian market. The Brazilian online sports betting and iGaming market has highly attractive characteristics, including a population of over 200 million people, with sport, and football in particular, being a fundamental part of its culture.
- Enhancing the portfolio with the addition of fast-growing local brands to the existing business, creating a prominent position in Brazil. Therefore, NSX entered the market in 2021, growing significantly to become the fourth operator by 2023.
- A compelling synergy opportunity through access to Flutter Edge and significant value creation. The Company anticipates revenue synergies to be achieved by providing NSX with access to Flutter’s pricing and risk management capabilities for a differentiated sports betting product offering. This is in addition to sharing Flutter’s expertise and content to enhance the iGaming experience.
Details of the transaction between Flutter and NSX, owner of Betnacional
Following its successful strategy in other newly regulated markets, Flutter expects to drive market share growth in the country and cement future profitability through customer investments.
According to the official note, Flutter expects the acquisition of NSX to contribute US$220 million in additional revenue and an adjusted EBITDA loss of US$70 million, reported in the international reporting segment.
Under the terms of the agreement, upon completion, Flutter has committed to pay a cash consideration of approximately US$350 million and contribute its existing business to Betfair Brasil, in exchange for a 56% stake in the newly combined Flutter Brasil business.
Additionally, a mechanism implemented in the agreement allows Flutter to increase its equity stake through reciprocal buy/sell agreements in the fifth and tenth year after the completion of the deal.
CEO Peter Jackson commented: “I am delighted to welcome NSX – operator of Betnacional, a leading Brazilian sports betting and iGaming brand – to the Flutter portfolio. The deal aligns perfectly with our value-creating M&A strategy.”
“The combination of NSX’s vast local expertise, our existing Brazilian business and the advantages of Flutter Edge, creates a compelling opportunity to capitalize on the promising future growth trajectory in Brazil,” he added.
