Playtech confirms rumors about potential Snaitech acquisition by Flutter

Playtech has quashed rumors that it may be selling its Snaitech business to Flutter Entertainment PLC. In a statement on Wednesday, the company put rest to speculation and confirmed that it had indeed been approached by Flutter, which is interested in buying the software development company.

Playtech and Flutter explore potential Snaitech sale

Snaitech’s exact value is a bit of a moving target, but Playtech’s press release suggests that it may be valued at anything around GBP2bn ( roughly $2.57bn). This acquisition could come at a very important time for Flutter and Playtech, and especially when it comes to the Italian gambling market which is set to undergo re-regulation again.

News of the potential sale, though, has been well received, with Playtech shares increasing their value by 18% to 641.24 pence on Wednesday, boosting the company’s own valuation to GBP1.98bn , Playtech also confirmed in the press release.

Although the deal is far from being sealed, Playtech has agreed to grant Flutter a period of exclusivity during which the company would be able to conduct its due diligence and prepare the necessary financial documentation. Flutter’s stock was also boosted by the news, seeing its share value increase by 8.7%.

Meanwhile, Flutter also reported that its second-quarter results have been on track with expectations, and exceeding certain guidelines, prompting the company to recalibrate its annual outlook. Most of this has been brought in by the Euros, the completed soccer tournament.

Specifically, Pretax income hit $350m in Q2, more than doubling the amount from a year earlier, with revenue increasing to $3.61bn. Flutter is not worried about the changes in the regulatory market either, as the company already have a very strong exposure to the local market.

Flutter committed to consolidating its Italian footprint

For one, Flutter is in control of Sisal, the largest gambling operator in Italy, and the acquisition of Snaitech would drive significant synergies, consolidating the company’s footprint in the country. As an aside, Snaitech is an Isle of Man licensed entity, and not exclusively focused on the Italian market.

However, Snaitech has been able to solidify its footprint in Italy and it operates both digital and land-based betting and gaming services, making it an important acquisition asset. Snaitech, though, may not be the only company that Flutter Entertainment is looking to buy.

In a comment to Reuters earlier this week, Peter Jackson, Flutter’s CEO, said that his company was going through "a long list" of potential acquisition targets, but did not mention what assets the company may be buying next.

Image credit: Playtech