Flutter to acquire Italian online gaming operator Sisal from CVC for $2.1B

Flutter Entertainment announced Thursday the acquisition of Italian gaming operator Sisal, from CVC Capital Partners Fund VI, for a consideration of approximately $2.1 billion (€1.913B/£1.62B). The transaction is likely to be completed during Q2, 2022, and follows Flutter's recent acquisition of UK online bingo operator Tombola last month. 

Sisal is a betting, gaming and lottery operator headquartered in Milan. In the 12 months to December 2021, Sisal expects to generate EBITDA of $280 million, with 59% coming from its online offering and the remainder coming from a combination of retail and lottery operations. This new acquisition is expected to be accretive to adjusted earnings in the first 12 months after completion. 

Approximately 90% of Sisal’s 2021 EBITDA is generated in Italy with the balance coming from regulated lottery operations in Turkey and Morocco. The business employs circa 2,500 people today. 

Sisal had previously filed a request for an IPO on the Milan Exchange, according to a statement. CVC originally bought Sisal Group in 2016 for 1 billion euros. Sisal focuses on gaming and betting services in Italy, managing games including Totocalcio, Totip, and SuperEnalotto. The company’s retail channel will be targeted by existing Flutter brands PokerStars and Betfair, while Sisal’s casino product will get access to Flutter’s in-house gaming content.

According to Flutter's press release Thursday, the addition of Sisal delivers several key strategic outcomes: 

• Secures its position in Italy by bringing the online brand into the Flutter portfolio. The combination of Sisal with Flutter’s existing online Italian presence through PokerStars and Betfair will result in a combined online share of 20%

• Increases the group’s exposure to a fast-growing, regulated online market: Italy is Europe’s 2nd largest regulated gambling market and one that has seen online penetration grow from 10% in 2019 to approximately 20% today. Sisal’s online revenues have grown by a compound annual rate of 34% since 2016 

• Sisal’s omni-channel offering will deliver a competitive advantage to Flutter’s business, particularly given Italy’s advertising restrictions and the prevalence of cash deposits and withdrawals through retail

• Increases Flutter’s recreational customer base with the addition of 300,0003 highly engaged online average monthly players and over 9.5 million retail customers

• Further diversifies Flutter’s product and geographical footprint and increases the proportion of Flutter’s revenue from regulated markets which in Q3 2021 was over 91%

• Bolsters Flutter’s existing talent pool by adding a proven management team that will continue to lead the business and who have sought to take a leadership position in the promotion of safer gambling in Italy

In an official press release, Peter Jackson, Flutter CEO, spoke about this acquisition and said: “I am delighted to add Sisal, Italy’s leading gaming brand, to the Group as we look to attain a gold medal position in the Italian market. For some time we have wanted to pursue this market opportunity via an omni-channel strategy and this acquisition will ideally position us to do so. Sisal has grown its online presence significantly in recent years, aided by its proprietary platform and commitment to innovation. I’m excited to see how Flutter can complement these capabilities through our scale, differentiated products and operational capabilities. We look forward to welcoming Francesco and the rest of the Sisal team to Flutter in 2022.” 

Francesco Durante, Sisal Chief Executive, commented: “Over the last five years, thanks to CVC’s support, we have successfully transformed Sisal into a leading digital and international gaming company. Through our commitment to digital innovation, international expansion and safer gambling, we have achieved a leadership position in Italy’s online gaming market and developed our global footprint by winning lottery tenders in Morocco and Turkey. We are delighted to join Flutter and are convinced that through its scale and operational capabilities, we will be able to further strengthen our leadership in the markets we operate in. I look forward to working with Peter and the team on the next chapter of Sisal history.”

Giampiero Mazza, Managing Partner at CVC Italy added: “We are very proud of the success achieved by Sisal and its transformation since our acquisition in 2016. Through heavy investment in its digital competencies, Sisal has become Italy’s leader in online gaming while also growing its international operations. Furthermore, the Company is leading the Italian industry in ensuring responsible and safe gaming. We want to thank Francesco and the whole management team for their incredible dedication, focus and ambition, and for leading this successful journey in spite of regulatory challenges and the pandemic. Flutter is a fantastic new partner for Sisal and we wish them the very best.”