Flutter Entertainment has agreed to acquire an initial 56% stake in NSX Group, operator of the Brazil-facing Betnacional brand, for $350.0m (£266.5m/€316.0m).
Detailing the deal, Flutter said the acquisition will allow it to establish a new ‘Flutter Brazil’ business. The group expects to complete the purchase of the controlling stake in Betnacional’s 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 country’s leading operators. Based on Regulus Partners and internal estimates, NSX holds 12% of Brazil’s sports betting market and 9% of the total online market.
Why is Flutter acquiring NSX?
Setting out its reasons for the acquisition, Flutter describes the purchase as a “compelling” deal for the group. It adds that the agreement is in line with its strategy and is expected to create shareholder value.
“We 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,” Flutter CEO Peter Jackson said.
Going into further detail, Flutter said the deal delivers an “enhanced competitive position” in what is a “fast growing, newly regulated market”. Brazil is due to fully regulate its online sports betting and igaming market in January 2025.
“The strength of the combined Flutter Brazil business will position it exceptionally well to capitalise on the opportunity in this attractive market,” Flutter said.
Flutter continues ‘local hero’ approach
The acquisition fits with its ‘local hero’ 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.
“Compelling” 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.
“Flutter Brazil will be exceptionally well positioned to take full advantage of the significant growth opportunity in the newly regulating Brazilian market,” Flutter said.
“In 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.
“This is expected to result in a Flutter Brazil adjusted EBITDA loss of approximately $90m-$100.0m in 2025.”
Flutter will provide a further update on the acquisition at its investor day on 25 September.
