Flutter Entertainment says it will have a “podium position” in Brazil after the completion of a US$350m investment in the owner of the Betnacional brand.
The group revealed on Friday it is acquiring an initial 56 per cent stake in NSX Group, which is the number four operator in Brazil.
As well as the $350m investment, Flutter will throw its existing Betfair Brazil business into the mix in return for the stake in the newly combined Brazil business.
“We believe that combining the extensive local expertise of the NSX team, our existing Betfair business and the power of the Flutter Edge, will create a compelling opportunity to capitalise on the growth opportunity in Brazil which presents an exciting runway of future growth,” said Flutter CEO Peter Jackson.
NSX entered the Brazilian market in 2021 and currently has 12 per cent market share of the sports betting market and nine per cent market share of the total online market, Flutter said.
A “strong local management team” will enable decision-making “close to the customer,” while a proprietary technology platform developed locally in Brazil will enable a “fast-paced and agile product offering,” the company said.
“Flutter Brazil will be exceptionally well positioned to take full advantage of the significant growth opportunity in the newly regulating Brazilian market,” Flutter said.
“In line with our successful strategy in other newly regulated markets such as the US, we expect to drive market share growth and embed future profitability through disciplined customer investment. This is expected to result in a Flutter Brazil adjusted EBITDA loss of approximately $90-100m in 2025.”
On a standalone basis, NSX is expected to generate revenue of approximately $256m and adjusted EBITDA of around $34m.
The deal, which is expected to close by Q2 next year, will include a mechanism allowing Flutter to increase its stake in NSX through reciprocal put/call arrangements in year five and year 10 following the completion date.
The Brazilian online betting and gaming market is due to be full regulated in early 2025.
