Flutter takes 56% stake in Betnacional parent company for $350m
Operator to combine existing Betfair business to create Flutter Brazil, as bosses of the New York-listed giant hail “extensive local expertise”
Flutter Entertainment has snapped up a 56% stake in NSX Group, the company behind Brazilian operator Betnacional, for $350m (£266.5m) as it looks to secure a podium position in the regulated market.
Under the terms of the deal, Flutter will pay the nine-figure sum in cash, as well as combine its Brazil-facing Betfair business with its share in NSX Group to create Flutter Brazil.
The New York-listed firm also has a mechanism in place to increase its shareholding in NSX through put/call arrangements in five years and 10 years after the transaction is completed.
The $350m figure gives NSX an implied enterprise value of $625m, although Flutter did note disclose at what price point it would be able to require the remaining share in the domestic operator.
Flutter said Betnacional is the fourth-largest operator in Brazil, with the UK-based firm also operating PagBet, MrJack.bet and BetPix.
The business is expected to generate around $256m in revenue and $34m in adjusted EBITDA in full-year 2024.
Flutter also noted that NSX Group currently holds a 12% market share for sports betting and a 9% share of the total online market in the South American country.
Already, Betfair Brazil is delivering “strong growth”, with the brand expected to reported revenue of around $70m in 2024.
Flutter pointed to Brazil’s huge population of more than 200 million people as a core reason for pursuing the deal, citing sports and football as a “key part of Brazilian culture”.
The operator also reported that compound annual GGR growth in the unregulated market has hit 38% since 2018, reaching almost $3bn in 2023.
NSX is a local hero in Brazil, having entered the market in 2021. The in-situ management will continue to lead the combined Flutter Brazil business.
NSX also boasts a proprietary tech platform developed in Brazil, which is set to be bolstered by access to Flutter’s in-house pricing and risk management tools.
That strategy will form part of the group’s ‘Flutter Edge’ policy, whereby the global business cherry-picks product and tech from its wider portfolio to embed into its suite of brands.
The operator said: “The majority of growth and market share gains [in Brazil] have been delivered by locally focused brands.
“Consolidation in the fully regulated market from early 2025 is expected to benefit established, local operators, due to the associated tax, licensing and compliance costs.
“Flutter Brazil will be exceptionally well positioned to take full advantage of the significant growth opportunity in the newly regulating Brazilian market.
“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.”
Bosses did note, though, that Flutter Brazil is expected to report an adjusted EBITDA loss of roughly $90m to $100m in 2025.
Alongside acquiring the stake in NSX, Flutter confirmed it expects the Brazil-facing PokerStars Casino and the sportsbook to be switched off from 1 January 2025, although the poker business will remain.
Management suggested this would result in an impact of $10m to adjusted EBITDA.
The regulated Brazilian online sports betting and igaming market is due to go live on 1 January 2025, with Flutter and NSX Group two of the 113 operators to have applied for a licence by mid-August.
The deal is subject to standard regulatory approval and is expected to close by Q2 2025.
Peter Jackson, Flutter CEO, said: “I am excited to announce the addition of NSX, operator of Betnacional a leading Brazilian sports betting and igaming brand, to the Flutter portfolio.
“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.”
During Flutter’s Q2 earnings call, Jackson said M&A would be the most likely way the operator would look to accelerate growth in the Brazilian market as part of its aims to take podium positions across the globe.