The company will pay USD 350m for the majority stake in NSX Group, owner of the Brazilian company.
Brazil.- Flutter Entertainment announced the acquisition of an initial 56 percent stake in NSX Group, a leading Brazilian operator with its brand Betnacional for a total amount close to USD 350m. This concludes a deal that had been under negotiation for over a month.
The transaction is fully aligned with Flutter's strategy to invest in leadership positions in international markets, securing a prominent position for Flutter in the recently regulated and highly prospective Brazilian market. NSX is the number 4 operator in Brazil, with a portfolio of brands including the flagship brand Betnacional. Independently, NSX is expected to generate revenues of approximately USD 256m and an adjusted EBITDA of about USD 34m in 2024.
According to the transaction agreement Flutter will pay a cash consideration of approximately USD 350m and will contribute its existing Betfair Brazil business, in exchange for a 56 percent stake in the business. Additionally, a mechanism has been implemented to allow Flutter to increase its shareholding through reciprocal sale/purchase agreements in year five and year ten after the completion date of the agreement.
The completion of the transaction is subject to regulatory approvals and is expected to close in the second quarter of 2025.
“I am pleased to announce the addition of NSX, operator of Betnacional, a leading Brazilian brand in sports betting and electronic games, to the Flutter portfolio,” commented Flutter CEO, Peter Jackson.
Then, Jackson added: “We believe that combining the extensive local experience of the NSX team, our existing Betfair business, and the power of Flutter Edge will create a compelling opportunity to capitalize on the growth opportunity in Brazil, which presents an exciting future growth path.”
In addition to being in line with its future strategy, Flutter stated that, once completed, the acquisition is expected to create value for shareholders in three areas:
Regarding achieving a competitive position in the Brazilian market, Flutter provided market statistics and highlighted that it is expected to fully regulate its online sports betting and electronic games market by early 2025.
With a population of 200 million with a great interest in sports, especially football, the operator stated that there is a “strong demand for sports betting and electronic gaming products” in Brazil, as the unregulated market has experienced a compound annual growth rate of gross gaming revenues of 38 percent from 2018 to nearly USD 3,000m in 2023, and most of the growth and market share gains are due to locally focused brands.
Flutter added that the consolidation in the fully regulated market “will benefit established local operators, due to associated costs of taxes, licenses, and compliance” and that the combined strength of Flutter Brazil will “position it exceptionally well to capitalize” on the market.
See also: Betnacional applies for a license to operate fixed-odds betting in Brazil
Regarding improving its portfolio of “local hero” brands, Flutter reiterated that the combination of the NSX Group brand and its Betfair business “will create a podium position in Brazil”, as NSX is the fourth operator in the region with a 12 percent share of the sports betting market and a 9 percent share of the total online market.
Flutter Brazil will be led by a local management team to enable “decision-making close to the customer”, with a locally developed proprietary technology platform to enable “an agile and fast-paced product offering”.
“Flutter Brazil will be exceptionally well positioned to fully capitalize on the significant growth opportunity in the newly regulated Brazilian market,” summarized the company.
