The opinion text below is by Ricardo Bianco Rosada and addresses the acquisition of 56% of Grupo NSX, owner of the Betnacional, Mr. Jack.bet and PagBet brands, by Flutter Entertainment, in a deal valued at US$350 million (approximately R$ 2 billion).
He discusses the strategic importance of this transaction for Flutter, which seeks to consolidate its position in the Brazilian sports betting and iGaming market.
Check out Ricardo Bianco Rosada’s text in full:
First, I was very happy to receive the news of the sale of Grupo NSX, owner of the brands Betnacional, Mr. Jack.bet and PagBet, to Flutter Entertainment. This is a very positive fact and will contribute to the maturation and professionalization of the Brazilian market. 56% was acquired, in a deal valued at around US$350 million (approximately R$2 billion). This marks a significant moment for the industry, as well as establishing a valuation standard for future acquisitions and mergers.
Flutter is a world leader in online sports betting and iGaming, and in this way seeks to consolidate its position in Brazil by incorporating prominent local brands such as Betnacional, Pagbet and Mr. Jack Bet into its portfolio. This strategic move not only strengthens Flutter’s presence in the country, but also signals the growth potential and attractiveness of the Brazilian market in a scenario of imminent regulation.
I will explore five points that are very evident:
High Pay or Market Entry Strategy?
Although the amount paid may seem high, it is important to consider the strategy behind the transaction. Flutter is investing not only in acquiring a profitable company, but also in securing a prominent position in a market with exponential growth potential. “They paid a premium for expected growth and the opportunity to establish themselves as a leader in a newly regulated market,” noted one M&A expert. Therefore, the investment can be seen more as a long-term strategic bet than an excessive payment.
Trend in the Brazilian Market
There is a clear trend of mergers and acquisitions in the Brazilian betting and gaming market, especially with regulations expected to come into force in 2025. International companies see Brazil as an emerging market with enormous potential, given the national passion for football and a population of more than 200 million inhabitants. The expectation is that, with regulation, there will be consolidation in the sector, benefiting established operators with a strong local presence. This should further boost M&A activity as companies look to strengthen their positions and comply with regulatory requirements.
Spotlight on Brazil with the Acquisition of NSX
Flutter’s acquisition of NSX definitely puts Brazil in the international spotlight. “The confidence of large companies like Flutter Entertainment in Brazil’s long-term potential validates the strength of the sector in Brazil,” commented a market analyst. This transaction highlights the country as a key market for future investments in the betting and gaming sector, attracting the attention of other global players that are not yet present in Brazil or that are looking to expand their operations.
Transaction Valuation
The 18x EBITDA multiple used in NSX’s valuation is considered high compared to similar transactions in other countries. For example, more mature European markets typically see multiples between 10x and 12x EBITDA. However, this high multiple reflects expectations of accelerated growth in the post-regulation Brazilian market. Furthermore, the inclusion of Betfair Brasil in the negotiation, responsible for around 27% of NSX Group’s revenue, could further increase the value of the operation.
Challenges in the Search for the Ideal Partner in Brazil
Despite growing international interest, foreign companies face challenges when seeking partners in Brazil. Issues such as cultural alignment, understanding the local market and regulatory compliance are crucial. Furthermore, identifying companies with a solid reputation, an established customer base and the ability to adapt to new regulations is not a simple task. “Finding the ideal partner requires in-depth due diligence and a clear understanding of the nuances of the Brazilian market,” said an industry consultant.
Flutter Entertainment’s move reinforces the attractiveness of the Brazilian betting and gaming market and signals a period of transformation and opportunities. The combination of local expertise with global resources can set new standards in the sector, benefiting not only the companies involved, but also consumers and the Brazilian economy as a whole.
We look forward to the scenes from the next chapter, which promise to be very interesting!
(*) Ricardo Bianco Rosada, founder of the consultancy brmkt.co, and specialist in the gambling, industry, retail and services market. With more than 20 years in the industry, he has worked with renowned clients such as Banco Itaú, Bosch, Fujifilm, Heineken, Honda, Mycon, and was CMO at bets such as Betboo, Bodog and galera.bet.
