London-listed gambling tech provider Playtech has agreed to sell its Italian gaming arm Snaitech to Flutter Entertainment for €2.3bn (£1.9bn).
Playtech first confirmed discussions with Flutter, the owner of Paddy Power and Betfair, in August.
The deal values Snaitech at a significant premium to Playtech’s market capitalisation as of 13 August, the last date before negotiations were closed.
The deal is equivalent to £6.27 per Playtech share, a 16.5 per cent premium on the company’s share price of £5.38 as of the same date.
Playtech chief executive Mor Weizer, said: “While Snaitech has been an important part of the Playtech group’s growth in recent years, the Board agreed that this transaction represents a compelling opportunity to maximise value for our shareholders while also allowing them to share in further upside from continued ownership of a leading B2B business.
“The combination of the Playtech group’s leading technology with its exposure to attractive markets, including in the Americas and Europe, provides a strong platform for growth in the medium-term. We are excited about what the future holds and the many opportunities ahead of us.
“In Flutter, Snaitech will have a new owner with an existing presence in Italy and all of the opportunities that brings. I’m confident that Snaitech will continue to excel under their ownership.”
Once the deal is finalised, the company plans to return €1.7bn (£1.4bn) to €1.8bn (£1.5bn) to shareholders via a special dividend.
The company also said it would shift its focus to its technology-led B2B gambling operations, moving to accelerate growth in high-potential markets.
On Monday, Playtech said it had renegotiated its deal with Mexican gambling operator Caliente, securing a 30.8 per cent equity stake in Caliente Interactive, the new holding company for Caliplay.
Peter Jackson, Flutter chief said: “I am delighted to announce the acquisition of Snai, one of the leading players in Italy, Europe’s largest regulated market. This transaction is compelling strategically and financially.
“It fits perfectly within our strategy for value creating M&A and creates a significant opportunity to accelerate Snai’s growth by providing them with access to Flutter’s market leading products and capabilities both in the US and globally,” he added.