SBC News Blackstone favours IPO exit for CIRSA

Blackstone favours IPO exit for CIRSA

Blackstone is considering various strategic options for its Spanish gambling asset Grupo CIRSA, in which the US private equity fund is reported to favour an initial public offering (IPO).

The development comes as the fund is reported to have invited proposals from investment banks to manage a potential share sale and refinance CIRSA existing long-term debt, which according to the latest accounts, stands at circa €2.3bn.

FY2022 trading saw CIRSA declare that it had returned all core business units to outperform its pre-COVID 2019 results. Of significance, the heritage Spanish gambling group declared a record 2022 EBITBA of €525m.

The decision on whether to pursue an IPO may be influenced by the recent lacklustre performance of Italian peer Lottomatica, whose shares began trading in Milan after being backed by Apollo Global Management. Lottomatica’s IPO was priced at the bottom of its targeted valuation range, and its shares have fallen in aftermarket trading.

Using Lottomatica’s valuation as a benchmark, CIRSA could be worth several billion euros, including debt. Blackstone originally acquired Cirsa in 2018 at an enterprise value of 2.2 billion euros. In 2021, local media reported that Blackstone was exploring an IPO for the group, but a deal never materialised.

In 2018, Blackstone took ownership of CIRSA, acquiring the company from founder Manuel Lao Hernandez, who was reported to have sold the business for €2bn.

CIRSA’s 2022 highlights included the expansion of its casino footprint in Morocco, where it won rights to open a new casino in Tangier. In Europe, the company entered Italy’s online gambling market by finalizing the acquisition of licensed operator E-Play24. CIRSA operates across nine countries, with 146 casinos, over 81,000 recreational machines, 78 bingo halls, 241 lounges, and nearly 3,000 sports betting points.

Cirsa President Joaquim Agut praised the company’s strong performance amid a complex economic environment due to COVID-19 restrictions and cost increases. He credited the entire organisation’s commitment to achieving financial and sustainability objectives for the successful return to historical quarterly growth and surpassing pre-pandemic results.

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