Flutter forms new Brazil business with $350m NSX Group acquisition
Flutter Entertainment has agreed to acquire an initial 56% stake in NSX Group, operator of the Brazil-facing Betnacional brand, for $350.0m (ÂŁ266.5m/âŹ316.0m).
Detailing the deal, Flutter said the acquisition will allow it to establish a new âFlutter Brazilâ business. The group expects to complete the purchase of the controlling stake in Betnacionalâs parent company NSX by Q2 of 2025.
Flutter will pay $350.0m in cash and contribute its existing Betfair brand to the new Brazil arm. The agreement also includes a clause allowing Flutter to increase its holding in years five and 10 following completion date.
NSX counts Betnacional as its flagship brand but also operates Pagbet, MrJack.bet and Betpix across igaming and sports betting. In 2024, NSX is expected to post approximately $256.0m in revenue and $34.0m in adjusted EBITDA.
The group has been active in Brazil since 2021, growing to become one of the countryâs leading operators. Based on Regulus Partners and internal estimates, NSX holds 12% of Brazilâs sports betting market and 9% of the total online market.Â
Why is Flutter acquiring NSX?
Setting out its reasons for the acquisition, Flutter describes the purchase as a âcompellingâ deal for the group. It adds that the agreement is in line with its strategy and is expected to create shareholder value.
âWe believe that combining the extensive local expertise of the NSX team, our existing Betfair business and the power of the Flutter Edge, will create a compelling opportunity to capitalise on the growth opportunity in Brazil which presents an exciting runway of future growth,â Flutter CEO Peter Jackson said.
Going into further detail, Flutter said the deal delivers an âenhanced competitive positionâ in what is a âfast growing, newly regulated marketâ. Brazil is due to fully regulate its online sports betting and igaming market in January 2025.
âThe strength of the combined Flutter Brazil business will position it exceptionally well to capitalise on the opportunity in this attractive market,â Flutter said.
Flutter continues âlocal heroâ approach
The acquisition fits with its âlocal heroâ localisation strategy, to add recognised brands to its portfolio. This, it says, will create a podium position in Brazil.
With this, Flutter said its new Brazil business will benefit from a strong local management team enabling decision-making close to the customer. It also referenced a proprietary technology platform developed locally in Brazil.
âCompellingâ opportunity to deliver meaningful value creation
Finally, Flutter said the acquisitions provide an opportunity to drive synergies via access to the Flutter Edge technology stack.
On this, it says revenue synergies will be achieved by providing NSX access to proprietary pricing and risk management capabilities for a differentiated sportsbook offering.
âFlutter Brazil will be exceptionally well positioned to take full advantage of the significant growth opportunity in the newly regulating Brazilian market,â Flutter said.
âIn line with our successful strategy in other newly regulated markets such as the US, we expect to drive market share growth and embed future profitability through disciplined customer investment.Â
âThis is expected to result in a Flutter Brazil adjusted EBITDA loss of approximately $90m-$100.0m in 2025.â
Flutter will provide a further update on the acquisition at its investor day on 25 September.
