According to Chinese folklore, 2021 was the Year of the Ox – but in the iGaming sector, this is a calendar year in which mergers and acquisitions were very much the spirit animal.
As if to prove the point, there’s still been time left on the calendar for another major takeover to be plotted – Flutter have had a mammoth £1.6 billion offer for the pan-European lottery operator Sisal accepted by their owner, the US private equities fund CVC Capital.
It’s a deal that would see Flutter grow their continental market share exponentially, but there may be another motive for the big bucks acquisition – Sisal are thought to be amongst the frontrunners for the next UK National Lottery licence, with the winner of that contest revealed in February.
There has been no confirmation as to how the takeover would impact that effort to wrestle Camelot’s lotto monopoly away from them, although the feeling is that Flutter would be only too glad to use Sisal’s expertise to take on the role.
The giant gambling group have confirmed that they will pay for the deal in cash outright – funded in part by an equity deal with Barclays Bank, and they have also agreed to pay off all of Sisal’s outstanding debts into the bargain.
If all of the necessary due diligence is completed, the takeover is expected to be completed in the second quarter of 2022 – after the decision has been made by the UK Gambling Commission on who will be handed the lottery licence.
Flutter’s CEO, Peter Jackson, said of the deal:
“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.”
It continues Flutter’s streak of takeover activity, after it was revealed in November that they had successfully purchased the bingo firm Tombola for £402 million.
The Italian Job
The lure of acquiring a ten-year licence to run the UK National Lottery draws would have been some carrot for Flutter.
But it seems as though their interest in Sisal is piqued by the firm’s prominence in the Italian casino gaming market. They have an estimated 300,000 active players online, as well as nearly ten million ‘retail’ customers.
Italy is the second largest iGaming market behind the UK, and Sisal is one of the major players in the sector – creating an empire that employs more than 2,500 people and that yielded a profit in excess of £200 million this year alone.
The Italian market could be worth as much as £3 billion by 2024 according to estimates, and with Sisal’s share of that pegged at 11.9% – allied to Flutter’s 8% slice of the pie courtesy of Betfair and PokerStars – you can see why the British firm was so keen to get their hands on the brand.
In addition to their casino offerings, Sisal is a major operatory in the lotteries niche, running Italy’s premier draw, Super EnaLotto, as well as lottery operations in Turkey and across Africa.