Blackstone parks CIRSA IPO plans 

CIRSA will not pursue a public listing in 2024, as the investors of the heritage Spanish gambling group have reportedly “parked plans for an IPO”.

Concluding 2023 trading, CIRSA announced that it had changed its legal identity to the new name ‘CIRSA Enterprises’, reflecting the firm’s business transformation since its majority acquisition by private equity giant Blackstone in 2018.

The change in name was reported alongside news that CIRSA management had deferred plans for a public offering, heavily speculated last year as Blackstone was stated to be “reviewing its Spanish options”.

During 2023, Blackstone was reported to be eyeing a + $3bn public listing for CIRSA, securing a significant premium on the PE fund’s $2bn acquisition of the heritage gambling group around six years ago.

An IPO was deemed the likely exit for Blackstone from Spanish gambling, as CIRSA had overcome 2020 pandemic headwinds, declaring consecutive profits in FY2021 and FY2022 of €330m and €552m, respectively.

The firm’s latest accounts detail that CIRSA holds net cash of €231m and capital liquidity of €530m, while its net financial debt stood at €2.2bn, reflecting a leverage ratio of x3.6 EBITDA.

Under Blackstone’s ownership, CIRSA has expanded its international footprint which saw the company acquire Modena Giochi, an Italian machine company, and a 60% stake in the Italian online gaming operator ePlay24.

CFO Antoni Grau cited that CIRSA has “the potential to escalate acquisition activities due to improved financial health”, but that management would maintain a “conservative approach to acquisitions”.

A conservative approach is required in 2024, as CIRSA will navigate a year of regulatory changes in Spain’s gambling laws, compliance, and operating duties.

The Spanish government will implement the “Royal Decree on Responsible Gaming Environments” as a national law in 2024, marking the next phase of Spanish gambling’s regulatory overhaul.

New legislation aims to ensure that Spanish gambling will have the most stringent surveillance of operators and market activities in Europe. Measures will include a new centralised player registry, cross-operator deposit limits and the mandatory record-keeping of ‘risk profiles’ for customers under the age of 25.

Despite the postponed IPO, CIRSA’s strong performance in 2022/2023 and strategic acquisitions signal a company confident in its growth trajectory and financial stability.