13th Sep 2024 08:49
(Alliance News) - Flutter Entertainment PLC on Friday said it has agreed a deal which will see the firm join the rostrum in Brazil's fast-growing gambling industry.
It said it has forked out USD350 million to secure a majority stake in NSX Group, which operates the Betnacional brand.
The stake will be acquired for USD350 million in cash and Flutter will also "contribute its existing Betfair Brazil business" for a 56% interest in the newly combined Flutter Brazil arm.
"In addition, a mechanism has been put in place to enable Flutter to increase its shareholding through reciprocal put/call arrangements in year five and year ten following the completion date," the firm explained.
Flutter Chief Executive Officer Peter Jackson added: "I am excited to announce the addition of NSX, operator of Betnacional a leading Brazilian sports betting and iGaming brand, to the Flutter portfolio. We believe that combining the extensive local expertise of the NSX team, our existing Betfair business and the power of the Flutter Edge, will create a compelling opportunity to capitalize on the growth opportunity in Brazil which presents an exciting runway of future growth."
Shore Capital Markets analyst Greg Johnson commented: "We see this as a sensible move, further expanding and accelerating its growth profile, consistent with its expansion profile and medium-term leverage ratios, albeit it will likely limit [earnings before interest, tax, depreciation, and amortisation] growth (ex-US) next year. We would also see a positive read across to Entain and the implied valuation of its larger Brazil within the context of the wider group.
"Given the size of this fast growing and newly regulated market, Flutter expansion in Brazil is not a surprise."
Flutter shares traded 0.5% lower at 16,750.00 pence each in London on Friday morning.
By Eric Cunha, Alliance News news editor
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