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Playtech plc (LSE:PTEC), the leading platform and services provider in the online gambling industry, has entered into a definitive agreement to sell Snaitech S.p.A. ("Snaitech") and its subsidiaries to Flutter Entertainment Holdings Ireland Limited, a subsidiary of Flutter Entertainment plc ("Flutter"). The sale, valued at approximately €2.3 billion, marks a significant milestone for Playtech as it shifts its focus towards its high-growth business-to-business (B2B) gambling markets.
Snaitech is one of Italy's leading sports betting and gaming companies, with a strong presence in both the online and retail sectors. The transaction is expected to close by Q2 2025, pending regulatory approvals, including antitrust and gaming authorities.
Strategic Focus and Shareholder Value
The decision to sell Snaitech aligns with Playtech’s strategy of simplifying its business and prioritizing technology-led growth in the B2B sector. The transaction is expected to unlock considerable capital for Playtech, allowing the company to focus on accelerating growth in its B2B gambling markets. Playtech plans to return a significant portion of the proceeds—between €1.7 billion and €1.8 billion—to shareholders via a special dividend following the completion of the deal.
In addition, Playtech intends to strengthen its balance sheet by repaying €350 million in outstanding bonds due in March 2026, significantly improving its financial position for future growth. Several major shareholders, representing approximately 34.38% of Playtech's total issued share capital, have expressed their support for the deal and related incentive arrangements for management.
Strong Valuation and Financial Highlights
The agreed sale of Snaitech values the company at an enterprise value of €2.3 billion, representing an attractive multiple of 9.0x Snaitech’s FY2023 adjusted EBITDA of €256.1 million. This valuation reflects a substantial premium over Playtech’s own FY2023 adjusted EBITDA multiple of 5.6x. The transaction will generate a significant return on investment for Playtech, which acquired Snaitech in 2018 for €846 million. Since then, Snaitech has seen a major transformation under Playtech’s ownership, with its EBITDA nearly doubling.
Playtech shareholders will benefit from the deal, which offers £6.27 per share—representing a 16.5% premium over Playtech’s share price of £5.38, as of August 13, 2024.
Rationale and Benefits of the Sale
The sale of Snaitech allows Playtech to capitalise on the progress made in expanding Snaitech’s online market share and strengthening its retail offering. The transaction represents a significant value creation event for shareholders, made possible by the business transformation achieved since Playtech’s acquisition of Snaitech in 2018.
Going forward, Playtech’s simplified business model will focus on its B2B offering, enabling it to invest in and improve its market-leading technology. This shift will position Playtech to grow its customer base and increase its wallet share with existing clients in the fast-growing global gaming industry.
Path Forward for Playtech
With a streamlined business model and a strengthened balance sheet, Playtech is poised for accelerated growth in its B2B markets. The company plans to use the proceeds from the sale to implement an ambitious growth plan, further enhancing its portfolio of strategic ventures and continuing its leadership in the global gaming technology space.
Playtech’s board of directors views the transaction as a positive step for the company, benefiting security holders by unlocking substantial value and enabling Playtech to focus on its core strengths.
