Flutter Finalizes Acquisition of Italian Gaming Operator Snaitech
Flutter Entertainment has finalized the acquisition of Snaitech S.p.A., an Italian betting and gaming operator, marking a significant expansion of its presence in the European gambling market. The transaction, which was first announced on April 30, was completed for a cash consideration based on an enterprise value of €2.3 billion.
LISTEN TO THIS ARTICLE:With the integration of Snaitech, or Snai, Flutter expects to strengthen its competitive position in Italy's gaming sector, where online gambling penetration remains relatively low in comparison to other European countries. Italy presents a growth opportunity due to its restrictive advertising environment, which increases the importance of strong retail networks.
Related: Flutter Receives Approval for €2.3 Billion Acquisition of SnaitechSnai's well-established brand and extensive retail footprint across the country are viewed as key assets in helping Flutter achieve its target of commanding approximately 30% of the Italian online market share. By incorporating Snai into its operational framework, Flutter aims to improve customer acquisition and engagement across both digital and land-based channels in Italy.
The acquisition places Snai under the umbrella of Flutter's International division, operating within the Southern Europe and Africa segment. This geographic expansion aligns with Flutter's broader strategy of enhancing local market performance through a portfolio of regionally dominant brands.
Operational efficiencies and cost synergies are central to Flutter's financial outlook following the deal. The company has outlined expectations for at least €70 million in annual cost savings over a three-year period.
These savings are anticipated to stem from reductions in operating costs and capital expenditures. A targeted investment multiple of 1.25x for operating cost synergies and capital expenditure savings of approximately €10 million are included in Flutter's post-acquisition projections.
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Flutter Tech Added to Snai's Operations
Flutter also intends to implement its proprietary suite of technologies and expertise, referred to as "Flutter Edge," across Snai's operations. This platform includes advanced pricing and risk management systems, tailored iGaming content, and improved user interface elements.
The rollout is aimed at increasing user retention and profitability by enhancing the customer experience on Snai's platforms. These capabilities are designed to provide a competitive advantage in both the retail and digital spheres of the Italian gaming market.
The acquisition was financed through a newly secured bridge credit facility totaling €2.5 billion, structured as senior secured first-lien term loans. This facility, backed by a consortium of banking institutions, was fully drawn on April 29 and carries a maturity date of April 29 of next year. It features two optional six-month extensions and bears interest at a rate tied to the EURIBOR benchmark plus a 1.25% margin, with incremental step-ups over time.
Proceeds from the bridge facility will be used to fund the acquisition, refinance existing debt obligations, and cover associated fees and expenses. Additional uses of the funds may include general corporate purposes and working capital requirements throughout the Flutter group. Despite the short-term increase in leverage resulting from the acquisition financing, Flutter reiterated its commitment to maintaining a medium-term leverage target in the range of 2.0 to 2.5 times.
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