Flutter (FLTR) shares surge on Sisal acquisition: Buy call?

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 Flutter (FLTR) shares surge on Sisal acquisition: Buy call?
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Highlights

  • Flutter Entertainment shares jumped 3.5 per cent following its acquisition news of Sisal on Thursday.
  • The Sisal deal is worth about EUR 1.913 billion, from CVC Capital Partners Fund VI

Ireland-based bookmaking firm Flutter Entertainment PLC’s (LON: FLTR) shares jumped by over 3 per cent on Thursday after the company said it has acquired Sisal, an Italy-based online gaming operator.

Flutter Entertainment’s Sisal acquisition details

The group acquired Sisal for a total consideration of EUR 1.913 billion (£1.62 billion from a private equity firm, the CVC Capital Partners Fund VI.

The deal completion is expected to take place in Q2 2022. Flutter said that the deal completely aligns with its investment strategy of boosting its position in regulated markets across the world.

Some of Flutter’s strategic benefits from this acquisition includes:

  • Garnering a gold medal position in Italy
  • Increasing Flutter’s exposure to a rapidly growing regulated market, such as Italy (which is the EU’s 2nd largest online gambling market)
  • Boosting the company’s customer base in the recreation segment
  • More diversification of the company’s offerings and geographic reach amongst other factors.

Sisal and its financial performance

Sisal, the Milan-based online gaming group has estimated its earnings before interest, tax, depreciation, and amortisation (EBITDA) will be EUR 248 million (£211 million), for the year to December 2021.

About 58 per cent of the EBITDA is expected to come from Sisal’s online services, while the remaining 42 per cent will be generated from its retail and lottery business segments.

From a region-wise perspective, about 90 per cent of Sisal’s EBITDA generation will be from Italy, while the rest 10 per cent is expected to come from regulated lottery operations in Turkey and Morocco.

Sisal has an employee strength of about 2,500 people at present.

Related Read: Pandemic sees rise in online gambling: Should you buy these 2 stocks?

Flutter Entertainment PLC’s (LON: FLTR) share price performance

The company’s shares were higher by 3.49 per cent, trading at GBX 11,700.00 on Thursday, 23 December at 09:28 AM BST. And the company’s market capitalisation stands at £19,845.39 million as of date.

Comparatively, the FTSE 100 index was at 7,352.00, higher by 0.14 per cent. (Flutter is a constituent of the FTSE 100 index).

It was among one of the highest risers on the index during Thursday’s early trading session, following the news.

 

Image source: Refinitiv

Image description: FLTR share price and volume

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