Lottomatica has entered the M&A arena in a bid to strengthen its position in the Italian online gambling space after entering into an agreement to acquire BetFlag.
The acquisition, undertaken via its GBO subsidiary, has seen transactional terms agreed regarding a purchase of online sportsbook and casino operator for €310m.
The deal represents Lottomatica’s first M&A play since the Italian gambling group was sold by International Game Technology to the Gamenet Group last year for $950m.
After initially inking a definitive agreement in December 2020, the €950m sale of the B2C gaming machine, sports betting, and digital gaming businesses was finalised five months later.
Lottomatica, which joined the Playtech ipoker network earlier this month, detailed that the transaction will be financed by the release of an escrow taken from the proceedings of senior secured notes that were issued on September 27, 2022.
Dealmakers disclosed that as of September 2022, Rome-based Betflag had generated an EBITDA of €36m. The transaction will carry €50m in earnout payments, based on the brand’s financial performance during the 2023 to 2024 period.
It was said that the acquisition was authorised to “consolidate Lottomatica’s presence in Italy’s online gambling market” by “strengthening its position in the online casino games sector”.
Furthermore, Lottomatica noted that “Betflag is licensed to operate all segments for Italian online gambling”, helping the group advance its new multi-brand strategy within a highly saturated Italian marketplace.”
The company also disclosed that BetFlag would be maintained as an autonomous brand, with the purchase intended to “enrich the group’s brand portfolio”.