Flutter Entertainment has agreed to acquire Italian online gaming company Sisal for £1.62 billion from CVC Capital Partners Fund VI.

Flutter Entertainment – Sisal Acquisition Deal

The purchase of Sisal, which is slated to close in the second quarter of 2022, is expected to be accretive to adjusted profits in the first 12 months following completion. In addition, the purchase price includes the whole payback of Sisal’s debt upon completion, which will be financed through new Flutter loan arrangements with Barclays Bank. The transaction is subject to approval by merger control and regular gaming and foreign investment approvals.

The Milan-based operator plans to earn EBITA of €248 million/£211 million in the 12 months to December 2021, with 58% of revenue coming from its online offering and the remaining from a combination of retail and lottery operations. Sisal generates around 90% of its EBITDA in 2021 in Italy, with the remainder coming from regulated lottery operations in Turkey and Morocco.

Flutter asserted that the acquisition of Sisal will result in “many critical strategic outcomes,” including the strengthening of its Italian foothold through the establishment of a 20% market share in conjunction with Betfair and PokerStars.

In addition, the company noted that the COVID-19 pandemic has caused Italian GGR to double from 10% in 2019 to 20% in 2021, making the sector the second largest in Europe after the UK, even though online penetration rates in Italy are significantly lower’ than those in the UK and Australia.

However, rising customer migration from retail to online verticals as a result of COVID-19 lockdowns may mitigate this commercial challenge, while the whole national market is forecast to reach £3.6 billion by 2024, representing an 18% compound annual growth rate over the next five years.

Quotes from the Press Release

“I am happy to welcome Sisal, Italy’s leading gaming brand, to the group as we strive for a gold medal position in the Italian market,” said Peter Jackson, Flutter’s chief executive.

“We’ve wanted to pursue this market opportunity through an omni-channel approach for some time, and this acquisition puts us in a great position to do so. Sisal has significantly expanded its online presence in recent years, owing to its proprietary platform and commitment to innovation. I’m excited to see how Flutter’s size, differentiated offerings, and operational capabilities can complement these capabilities. Francesco and the rest of the Sisal team will be welcomed to Flutter in 2022.”

“Over the last five years, with CVC’s assistance, we have effectively developed Sisal into a major digital and worldwide gaming firm,” Sisal CEO Francesco Durante stated.

“Through our commitment to digital innovation, international expansion, and safer gambling, we have positioned ourselves as the market leader in Italy’s online gaming sector and expanded our global footprint by winning lottery tenders in Morocco and Turkey.

“We are happy to join Flutter and are certain that our scale and operational expertise will enable us to further solidify our leadership in the markets in which we operate.” I’m looking forward to collaborating with Peter and the rest of the Sisal team on the next chapter of the company’s history.”

Sisal anticipates revenue of £590 million in 2021 after deducting gaming taxes. Additionally, it anticipates consolidated EBITDA of £211 million, of which 90% will come from its Italian activities – online: 59%, retail: 31%.

“We are extremely happy with Sisal’s performance and transformation since our acquisition in 2016,” stated Giampiero Mazza, managing partner at CVC Italy. “By investing heavily in its digital capabilities, Sisal has grown to become Italy’s market leader in online gaming while simultaneously expanding its overseas operations. Additionally, the company is a pioneer in the Italian gaming sector when it comes to promoting responsible and safe gaming.

“We want to express our gratitude to Francesco and the entire management team for their remarkable commitment, attention, and ambition, as well as for navigating this successful path in the face of regulatory obstacles and the epidemic.

“Flutter is an excellent new partner for Sisal, and we wish them continued success.”