Flutter buys sisal for € 1.9bn as he seeks to take top betting spot in Italy

Flutter, the gaming group behind Paddy Power and PokerStars, will buy Milan-based Sisal for € 1.9 billion, with the aim of becoming the largest betting company in Italy.

The deal with Sisal, Italy’s largest online betting group and one of the top three overall, would also make Flutter a candidate for running the UK’s national lottery, one of most valuable contracts of the British government.

Sisal, backed by private capital, has made an offer for the next lottery license in partnership with BT.

Peter Jackson, CEO of Flutter, has wanted to expand in Italy “for a long time” and Sisal’s 1,700 stores would give the group a competitive edge, helping it cope with advertising restrictions.

Italy is the second-largest regulated gambling market in Europe after the UK, but only 20% of its total betting income is taken online, even after players have turned to the internet to bet during lockdowns.

In the UK, online gambling accounts for around 60% of the market, a level Jackson said he expects Italy to reach on time.

The Sisal deal would allow Flutter to reach a fifth of the Italian online market, by partnering with the Betfair and PokerStars group brands, well known in Italy. The other big Italian betting companies are Snaitech and Lottomatica.

Online gaming accounted for just over half of Sisal’s € 696million revenue in 2020 thanks to a 12% internet market share in Italy, where many gamers like to deposit their funds to play online at venues. physical stores.

The tie-up with Sisal is the latest in a series of small acquisitions Flutter has made since finalizing a £ 10 billion merger with Canadian group Stars in October 2019, making it one of the largest gambling groups in the world.

In November he bought UK bingo company Tombola and in March he bought a controlling stake in Indian gaming start-up Junglee Games.

Sisal, which belongs to the private equity group CVC, had filed for an IPO in October, aiming for a valuation of between 1.8 and 2 billion euros, said a person familiar with the process.

Two people involved in the transaction said CVC subsequently received two offers to buy the company. Jackson said Flutter had followed Sisal’s progress towards an IPO, but “managed to sneak in and win” by buying the company.

CVC bought Sisal from Apax, Permira and Clessidra for € 1 billion in 2016.

Jackson said the UK National Lottery entry was “not something we are focusing on,” although Sisal stressed that she was “absolutely committed to our participation in the competition for the National Lottery Fourth License. “.

The UK gambling regulator is expected to announce its decision on the next lottery operator in February next year.

Other bidders include Czech gambling company Sazka, media mogul Richard Desmond and current lottery operator Camelot.

The deal values ​​Sisal at 7.7 times earnings before interest, taxes, depreciation and amortization for the year to December and is expected to end in the second quarter of next year. The group also operates lotteries in Turkey and Morocco.

Additional reporting by Kaye Wiggins and Silvia Sciorilli Borrelli


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