Flutter acquires NSX to boost betting presence in Brazil

Flutter Entertainment has successfully acquired a 56% stake in Brazil’s NSX Group for approximately $350 million in cash, marking a significant strategic move in the rapidly evolving gaming landscape.

NSX is the driving force behind the burgeoning Betnacional brand, which has swiftly risen to prominence in Brazil’s expanding online betting sector. This acquisition underscores Flutter’s intention to solidify its standing in Brazil’s newly regulated market while advancing its overarching ambition to lead in key global markets.

Peter Jackson, CEO of Flutter, commented:

“This transaction exemplifies Flutter’s strategic agility as an ‘and’ business, aligning seamlessly with our approach to value-driven mergers and acquisitions.” He emphasized the unique opportunity presented by merging NSX’s extensive local knowledge with Flutter’s established Brazilian operations and the competitive advantages of the Flutter Edge. “Together, we aim to capitalize on the exhilarating growth potential in Brazil’s betting market.”

With a population exceeding 200 million and a fervent sports culture, particularly around football, Brazil is widely regarded as a lucrative market for online betting expansion.

To maximize its impact, Flutter plans to integrate NSX with its existing Betfair Brazil operations. This merger will leverage the strengths of both entities, creating a robust platform poised for future success.

Founded in 2021, NSX has rapidly ascended to become Brazil’s fourth-largest betting operator by 2023, showcasing remarkable growth in a competitive environment.

Flutter views this acquisition not only as a means to enhance its market share in Brazil but also as a strategic addition to its collection of “local hero” brands. The integration of NSX is expected to yield significant revenue synergies through the application of Flutter’s proprietary technologies, including advanced pricing algorithms, risk management frameworks, and engaging iGaming content. This will enhance the overall user experience for sportsbooks and gaming enthusiasts alike.

Financially, Flutter anticipates that NSX will contribute approximately $220 million in revenue by 2025. However, an adjusted EBITDA loss of $70 million is projected—aligned with expectations for a newly regulated, high-growth market. These results will be categorized under Flutter’s International segment, reflecting the company’s commitment to transparency and fiscal responsibility.

Moreover, as part of the agreement, Flutter has secured options to increase its ownership share through put and call arrangements, set for review at the five- and ten-year milestones post-acquisition. Although this acquisition may initially elevate leverage levels, Flutter remains committed to its medium-term net leverage target of 2.0x to 2.5x, reinforcing its long-term financial sustainability.

In summary, Flutter’s acquisition of NSX Group reinforces its position as a key player in Brazil’s online betting industry, showcasing its strategic foresight and capability to adapt in a dynamic regulatory landscape. As the gambling market continues to grow, Flutter’s investments and innovations will likely pave the way for a new era of gaming in Brazil.