Flutter Entertainment reports that it has acquired 56% of NSX Group's shares for US$350 million. The agreement foresees the creation of Flutter Brazil, which will operate the brands Betnacional, Mr. Jack, Pagbet, and Betfair, managed by NSX. The business valuation is estimated at US$1 billion, being the first unicorn in the betting segment in Brazil.
Flutter Entertainment, the world's largest betting platform, announced this Friday (13) the merger with NSX Group to create Flutter Brazil, which will own the brands Betfair, Betnacional, Mr. Jackbet, and Pagbet.
With a market value above R$200 billion on the New York Stock Exchange and revenue of R$66 billion in 2023, Flutter is a global leader in the betting sector. The integration with Betnacional not only strengthens its position in Brazil but also promises to add significant value to both brands.
This strategic move is aligned with Flutter's plan to consolidate leadership positions in international markets and strengthen its presence in the emerging and regulated Brazilian betting and iGaming market.
With the merger, Flutter Brazil emerges as a new giant in the sector, combining the strength of Betnacional with Flutter's global expertise. The merger between Flutter and NSX is the first unicorn in the Brazilian betting market. The business valuation as a whole is estimated at US$1 billion.
At the end of the transaction, Flutter will pay about US$350 million in cash and will contribute its current Betfair Brazil business, in exchange for 56% of the new combined company Flutter Brazil. A mechanism has also been established to allow Flutter to increase its stake through reciprocal purchase and sale agreements after five and ten years from completion.
NSX ranks number 4 among operators in Brazil – according to internal estimates and those of Regulus Partners – with a portfolio that includes the main brand, Betnacional, and its sister brands Mr. Jack and Pagbet. NSX is expected to independently generate approximately US$256 million in revenue and an adjusted EBITDA of about US$34 million in 2024.
The Brazilian partners of NSX Group will continue to lead the local operation for 10 years, ensuring the maintenance of the company's DNA and the continuity of its approach to the Brazilian public.
The deal has been discussed between the two groups for about a year, and during this time numerous due diligence processes and compliance rules were applied to reach the official announcement now. The final contract signing will occur from the start of the regulated Brazilian market on January 1, 2025.
Both NSX Group and Flutter have submitted their license applications to the Secretariat of Prizes and Bets of the Ministry of Finance, and operations will proceed with the processes in parallel.
From January 1, 2025, for a period of five years, they will continue with the two licenses, one for the operations of Betnacional, Mr. Jack, and Pagbet, and another for Betfair, with operations being conducted by the Brazilian partners through Flutter Brazil.
The Betnacional brand, already widely recognized and the exclusive sponsor of sports events on Rede Globo, with ambassadors such as Galvão Bueno and player Vini Jr., will benefit from the global infrastructure and expertise of Flutter, without losing its local essence.
The partnership between Flutter and Betnacional promises not only to strengthen the sports betting ecosystem in Brazil but also to create new opportunities for growth and innovation. Flutter Brazil will be well-positioned to capture the growth of the rapidly expanding and developing Brazilian market.
Benefits for shareholders
1- Enhanced competitive position in a growing and regulated market:
- Brazil is expected to fully regulate the online sports betting and iGaming market by early 2025.
- The country has a population of over 200 million people, with a culture strongly linked to sports, especially football.
- The unregulated market has been growing 38% annually since 2018, reaching nearly US$3 billion in 2023.
- Local operators already consolidated should benefit in the regulated market from 2025 due to tax, license, and compliance costs.
2. Strengthening of the portfolio of "local hero" brands:
- The addition of rapidly growing local brands will complement Betfair's business in Brazil, creating a leadership position in the country.
- NSX entered the market in 2021 and quickly became the fourth largest operator, with 12% of the sports betting market and 9% of the total online market.
- Betfair Brazil is also growing, with revenue expected to be about US$70 million in 2024.
3. Synergies and value creation:
- NSX will have access to Flutter's price and risk management capabilities, as well as iGaming expertise, providing a competitive edge.
- Flutter expects to boost market share growth and improve profitability in the regulated Brazilian market, with an estimated negative adjusted EBITDA of approximately US$90-100 million in 2025.
Peter Jackson, CEO of Flutter, commented: “I am excited to announce the addition of NSX, operator of Betnacional, one of the leading Brazilian brands in sports betting and iGaming, to the Flutter portfolio. We believe that the combination of NSX's extensive local expertise, our current Betfair business, and the power of Flutter Edge will create an attractive opportunity to capitalize on growth in Brazil”.
João Studart, CEO of NSX, declared: “We are ready to embark on a path of accelerated and robust growth. The management of our brands, now combined with the strength of Betfair, will bring a new impetus to the portfolio”.
Source: GMB
