Flutter to acquire UK online bingo operator Tombola in $541M deal, boosts under-indexed vertical

Irish bookmaker Flutter Entertainment is acquiring online bingo operator Tombola, the FanDuel and Betfair owner announced on Thursday. Tombola is one of the UK bingo market-leading operators, and emphasizes providing a low-staking bingo offering.

Flutter is purchasing the gaming company for an enterprise value of £402 million (USD541.6M), and the deal is expected to complete in Q1 2022, according to a press statement. Tombola, which has teams primarily located in Sunderland and Gibraltar, was the first major UK-focused operator to introduce both mandatory staking and deposit limits.

Tombola launched 16 years ago and currently has a revenue base with over 80% coming from the UK and 16% from Italy and Spain. About 400,000 players use their products per month, and the company currently employs more than 700 people. Tombola’s founder Phil Cronin is set to leave the company following the acquisition.

We are delighted to have announced our acquisition of @tombola today. A business we have long admired for its product, highly recreational customer base and focus on safer gambling. We look forward to combining our expertise. Read more about it here:https://t.co/ZMqRkWziAJ pic.twitter.com/xgEnHsbHWJ

— Flutter plc (@FlutterPLC) November 18, 2021

“Tombola is a business we have long admired for its product expertise, highly recreational customer base and focus on sustainable play,” said Peter Jackson, Flutter Chief Executive, upon the announcement. “The brand aligns closely with Flutter’s safer gambling strategy, a key area of focus for us.”

The CEO further said he was excited to combine Flutter’s digital marketing expertise with Tombola’s operation capabilities within the UK and Ireland division. The acquisition will also allow the Paddy Power owner to diversify its products, as well as expand the group’s position “in a product vertical in which it has historically under-indexed.”

“Flutter is delighted to add Tombola to the group,” Jackson added. “As the time comes for Phil to hand over the reins, I would like to thank him for building the success story that the business is today, and I look forward to welcoming the Tombola team to Flutter and growing a sustainable business for the future together.”

We look forward to welcoming the @tombola team to Flutter and growing a sustainable business for the future together. pic.twitter.com/bhh5Xu3gdh

— Flutter plc (@FlutterPLC) November 18, 2021

The company lists among the strategic advantages of this deal the ability to add “an engaged and sustainable player base,” with many customers that have remained active with the brand for multiple years. Moreover, the move will also enhance Flutter’s online gaming presence in its core UK market, at an attractive valuation.

Flutter also highlights the addition of further product capabilities and expertise to the group, and remarks Tombola’s business approach aligns with its safer gambling strategy.

In its financial year to end April 2021, Tombola generated pro forma revenue of £164 million and EBITDA of £38.5 million. Under the terms of the transaction, Flutter will pay £402 million cash upon completion for 100% of the business. It is conditional on merger control clearance by the UK Competition and Markets Authority.