Flutter Entertainment has secured terms for the acquisition of Italian online gaming operator Sisal, from CVC Capital Partners Fund VI for £1.62bn.
Scheduled to be completed during the second quarter of 2022, the purchase of Sisal, which is payable in cash and in full, is expected to be accretive to adjusted earnings in the first 12 months post-completion.
Moreover, the purchase amount includes full repayment of all Sisal’s debt upon completion and will be financed by way of additional Flutter debt facilities, agreed with Barclays Bank.
The transaction is conditional on merger control clearance and customary gaming and foreign investment consents.
Commenting on the acquisition, Peter Jackson, Flutter’s chief executive, stated: “I am delighted to add Sisal, Italy’s leading gaming brand, to the group as we look to attain a gold medal position in the Italian market.
“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.
“I’m excited to see how Flutter can complement these capabilities through our scale, differentiated products and operational capabilities. We look forward to welcoming Francesco and the rest of the Sisal team to Flutter in 2022.”
In the 12 months to December 2021, the Milan headquartered operator expects to generate EBITA of €248m/£211m, with 58 per cent coming from its online offering and the remainder coming from a combination of retail and lottery operations.
Approximately 90 per cent of Sisal’s 2021 EBITDA is generated in Italy with the balance coming from regulated lottery operations in Turkey and Morocco.
Flutter has stated that the merger of Sisal will deliver “several key strategic outcomes”, along with strengthening its Italian footing through establishing a market share of 20 per cent in combination with Betfair and PokerStars.
The company further highlighted that the COVID-19 pandemic has seen Italian GGR double from 10 per cent in 2019 to 20 per cent in 2021 – making the sector the second largest in Europe after the UK – although acknowledging that online penetration rates are ‘well below’ the UK and Australia.
However, increased consumer migration from retail to online verticals as a result of COVID-19 lockdowns could offset this commercial hurdle, whilst the overall national market is predicted to reach £3.6bn by 2024, equating to a five-year compound annual growth of 18 per cent.
Francesco Durante, Sisal chief executive, added: “Over the last five years, thanks to CVC’s support, we have successfully transformed Sisal into a leading digital and international gaming company.
“Through our commitment to digital innovation, international expansion and safer gambling, we have achieved a leadership position in Italy’s online gaming market and developed our global footprint by winning lottery tenders in Morocco and Turkey.
“We are delighted to join Flutter and are convinced that through its scale and operational capabilities, we will be able to further strengthen our leadership in the markets we operate in. I look forward to working with Peter and the team on the next chapter of Sisal history.”
Sisal expects to report revenue, after deduction of gaming duties, of £590m in 2021. Furthermore, it predicts consolidated EBITDA of £211m, 90 per cnet of which will come from its Italian operations – online: 59 per cent, retail: 31 per cent.
“We are very proud of the success achieved by Sisal and its transformation since our acquisition in 2016,” Giampiero Mazza, managing partner at CVC Italy, concluded. “Through heavy investment in its digital competencies, Sisal has become Italy’s leader in online gaming while also growing its international operations. Furthermore, the company is leading the Italian industry in ensuring responsible and safe gaming.
“We want to thank Francesco and the whole management team for their incredible dedication, focus and ambition, and for leading this successful journey in spite of regulatory challenges and the pandemic.
“Flutter is a fantastic new partner for Sisal and we wish them the very best.”
