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Paddy Power owner buys Italian gaming operator for €1.9bn

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Flutter Entertainment CEO Peter Jackson

Flutter Entertainment CEO Peter Jackson

Flutter Entertainment CEO Peter Jackson

Flutter Entertainment has purchased Sisal, an Italian online gaming and lotto operator, for €1.9bn.

The Milan-headquartered company is being bought from CVC Capital Partners Fund VI, according to a statement from the Paddy Power owner.

Sisal expects to generate earnings before interest, taxation, depreciation and amortisation (EBITDA) of €248m in the 12 months to December, with 58pc coming from its online offering and the remainder from a combination of retail and lottery operations.

Approximately 90pc of Sisal's EBITDA this year is generated in Italy, with the balance coming from lottery operations in Turkey and Morocco.

Italy is the second largest regulated gambling market in Europe after the UK, with total estimated gross gaming revenue (GGR) in 2019 of €19bn, Flutter said.

The acquisition “fully aligns with the group's strategy of investing to build leadership positions in regulated markets globally,” the company added.

Flutter said the addition of Sisal, which employs around 2,500 people, delivers “several” key strategic outcomes including providing it with a “gold medal position” in Italy by bringing a leading online brand into the Flutter portfolio.

The combination of Sisal with Flutter's existing online Italian presence, through PokerStars and Betfair, will result in a combined online share of 20pc.

In addition, the company said the purchase increases its recreational customer base with the addition of 300,000 “highly engaged” online average monthly players and over 9.5 million retail customers.

Peter Jackson, Flutter CEO, said: “For some time we have wanted to pursue this market opportunity via an omni-channel strategy and this acquisition will ideally position us to do so.”

“Sisal has grown its online presence significantly in recent years, aided by its proprietary platform and commitment to innovation.”

The deal for Sisal is payable in cash and in full on completion of the transaction. This amount includes full repayment of all Sisal's debt upon completion.

The transaction will be financed by way of additional Flutter debt facilities, agreed with Barclays Bank.

The deal, which is expected to conclude in the first half of next year, is conditional on “merger control clearance and customary gaming and foreign investment consents.”

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“We view this as a positive move by Flutter. Firstly, it diversifies group revenues further and will position it as the leader in the attractive Italian market,” analysts at Goodbody said.

“Since advertising restrictions were introduced in Italy an omnichannel presence has become key. We see significant opportunities for Flutter to implement its industry leading risk and trading capabilities on the business; along with increasing Sisals online gaming content,” they added in a note.

Shares in Flutter were up almost 4pc in mid-morning trading in Dublin on Thursday.


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