Flutter Entertainment plc (NYSE:FLUT), a global sports betting, gaming, and entertainment provider, is in discussions to acquire the Snaitech business from Playtech (LON:PTEC) plc, as revealed in a recent regulatory filing. The potential acquisition, which is still uncertain, has not yet led to a definitive agreement, and Flutter has stated it will provide updates when appropriate.
The disclosure, made in a Form 8-K filed with the U.S. Securities and Exchange Commission on Wednesday, August 14, 2024, outlines Flutter's interest in the Italian gaming firm Snaitech, a subsidiary of Playtech. The filing underlines that there is no assurance that the acquisition will proceed, emphasizing the preliminary nature of the discussions.
Snaitech, known for its prominence in the Italian betting market, operates a variety of betting services including sports betting, online gaming, and horse racing. Flutter's potential acquisition could represent a strategic expansion in the European market, aligning with its ongoing efforts to diversify and strengthen its global footprint.
Flutter, previously known as Stars Group Inc. and Amaya Inc., has undergone significant rebranding and restructuring in recent years. The company, headquartered in Ireland with principal executive offices in New York, is listed on the New York Stock Exchange and is recognized for its portfolio of leading brands in the gaming and betting industry.
The 8-K filing does not disclose financial details or the potential timeline for the acquisition. Flutter's General Counsel and Company Secretary, Edward Traynor, signed off on the filing, which is standard for such disclosures.
Investors and industry observers are advised to await further announcements for details on the progression of the acquisition talks. The information presented is based on the press release statement, and no further insights or speculative commentary accompany this news report.
In other recent news, Flutter Entertainment has seen significant developments in its financial performance. Oppenheimer raised its price target for the company from $240 to $255, maintaining an Outperform rating, following a 3% increase in Flutter's 2024 EBITDA guidance. This adjustment was driven by a rise in global players and robust performance in the U.S. and U.K. iGaming sectors, which saw revenue growth of 47% and 26% respectively.
Simultaneously, BTIG increased its price target for Flutter Entertainment from $245 to $249, maintaining a Buy rating, following strong second-quarter financial results. The company's revenue and EBITDA surpassed BTIG's expectations, particularly in the U.S. and other international segments.
Moreover, Morgan Stanley (NYSE:MS) increased its price target for Flutter Entertainment shares to £191.00, a 31% upside from the previous target, following an impressive second quarter. The company's revenue rose 20% to $3,611 million and adjusted EBITDA reached £738 million, up 17%, exceeding both the Visible Alpha consensus and Morgan Stanley's projections.
These are recent developments and reflect the company's strong performance in key markets, especially the United States. It is worth noting that the raised guidance implies a 41% YoY growth at the midpoint for U.S. revenue, reflecting Flutter's continued strong execution in the fast-growing U.S. sports betting and iGaming markets.
InvestingPro Insights
As Flutter Entertainment plc (NYSE:FLUT) explores the acquisition of Snaitech, investors are eyeing the company's financial health and market position. According to InvestingPro data, Flutter boasts a market capitalization of $36.61 billion, underscoring its significant presence in the gaming and betting industry. The company's revenue has grown by 19.29% over the last twelve months as of Q1 2024, indicating a robust expansion trajectory that could be further bolstered by strategic acquisitions like Snaitech.
Despite not having turned a profit in the last twelve months, analysts are optimistic, predicting profitability for the year ahead. This is reflected in two analysts revising their earnings upwards for the upcoming period, as noted in InvestingPro Tips.
With a strong return over the last five years, Flutter's potential to enhance its European market share through the Snaitech deal is being closely watched by the market. However, it's worth noting that the company is trading at a high EBIT and EBITDA valuation multiple, suggesting that its current earnings are highly valued by investors.
For those seeking further insights, InvestingPro offers additional tips on Flutter Entertainment, which can be accessed for more in-depth analysis and data to inform investment decisions.
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