17th Sep 2024 08:50
(Alliance News) - Playtech PLC on Tuesday announced a deal to sell its Italian betting operation Snaitech to Paddy Power owner Flutter Entertainment for EUR2.30 billion.
Bookmaker Flutter said the move is in line with its "strategy to invest in leadership positions in international markets".
Gambling software firm Playtech had announced talks with Flutter for a deal for the Snaitech Italian betting operation in August.
"Following the completion of the transaction, the Playtech group will focus on its technology-led offering in high-growth B2B gambling markets with an accelerated growth plan and an extensive portfolio of strategic ventures," Playtech said.
Playtech said the deal represented 627 pence per Playtech share.
It plans to return between EUR1.70 billion and EUR1.80 billion to shareholders through a special dividend once the deal is sealed.
In addition, Playtech intends to repay the amounts outstanding on its bond due March 2026 of EUR350 million, strengthening the balance sheet of the business going forward.
Playtech said shareholders representing just over 34% of its share capital backed the deal.
The company said deal provides a large "value creation event for shareholders", and provides an opportunity for significant further upside post-transaction as a leading global gaming business operating in high-growth B2B gambling markets.
Flutter said: "On completion, Flutter will assume the gold medal position in Italy with a 30% online share when combined with its existing Italian business, which will deliver efficiency benefits in a key market for the group."
Flutter said the deal, which is expected to close in the second quarter of 2025, is expected to be immediately accretive to earnings per share.
"The transaction is expected to deliver operating cost synergies of at least EUR70 million along with incremental revenue synergies," Flutter said in a statement. Capital expenditure synergies expected to be EUR10 million.
The synergies are expected to be achieved in the three years post completion of the transaction with 10% achieved in year one and 50% in year two. The cost to achieve these synergies is expected to be 1.25 times, Flutter added.
Flutter noted Snai is the number three online operator in the Italian market with a 9.9% share in 2023 and 291,000 average monthly players.
Shares in Flutter rose 0.8% to 17,030.00 pence each in London on Tuesday. Playtech fell 2.0% to 738.00p.
On Monday, shares in Playtech had risen 14% after it said adjusted earnings would be "slightly" ahead of expectations after a strong first half and announced a deal with Mexico's Tecnologia en Entretenimiento Caliplay, SAPI de CV.
By Jeremy Cutler, Alliance News reporter
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