Flutter Entertainment entered the Brazilian igaming market today by dint of purchasing most of NSX Group for $350 million. The all-cash transaction gives Flutter 56 percent of NSX.

“The transaction fully aligns with Flutter’s strategy to invest in leadership positions in international markets, securing a podium position for Flutter on completion in the regulating and fast-growing Brazilian market,” read an official Flutter statement. The company expects NSX and its Betnacional subsidiary to generate additional cash flow on the order of $34 million, along with 2024 revenue of $256 million.

The existing Betfair Brazil will be folded into NSX Group. Flutter will provide additional commentary on the transaction, which is expected to close in the spring of 2025, during its September 25 investor day.

Even though the deal is unlikely to be consummated prior to the early 2025 launch of regulated betting, Jefferies Equity Research analyst James Wheatcroft likes it. He noted that it gives Flutter pole position in a “highly attractive” Brazilian market.

Flutter’s own cash flow is being guided to a low-percentage cut in the wake of the transaction announcement. The change in guidance is attributed to the cost of customer acquisition once the merged entity goes live.

Wheatcroft sees a “path to accelerated growth and greater medium-term profitability in a $3bn market that is expected to fully be regulated in early 2025.” He added that Flutter’s current stock valuation doesn’t factor in the attractiveness of the company’s growth path.

The analyst projected a cash flow growth rate of 30 percent from the deal through 2030. He also noted that Flutter can increase its NSX Group stake in the fifth and 10th years of the pact.

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