CIRSA tracks path to €5bn IPO

Grupo CIRSA has grabbed Spanish business headlines, as rumors mount that the Blackstone-owned firm will announce its public listing imminently.

The Spanish heritage gambling group is yet to deny reports that it has engaged Morgan Stanley, Deutsche Bank, and Barclays to ‘prepare its route to an IPO’.

As reported by Economía Digital, the investment banks have been tasked with engineering a public offering that will value CIRSA at €5bn.

The €5bn valuation is viewed as a significant premium for Blackstone, the US private equity giant who acquired CIRSA in 2018 for €2bn from company founder Manuel Lao Hernandez.

Options on Blackstone’s future with CIRSA have been speculated on since 2022, as the Spanish gambling group returned to operating profits following the COVID-19 pandemic.

In 2023, a reorganized CIRSA declared net revenues of €1.91bn, combined with operating profits of €80m. Growth continues in 2024 as this week, CIRSA declared Q1 net revenues of €513m and EBITDA results of €169m.

“These results confirm the solid growth trend of the company’s business thanks to its strategy of focusing on key markets and continuously improving the offer and quality of service,” CIRSA commented on Q1 results.

In Spain, CIRSA operates a network of over 30,000 gambling machines across recreational and hospitality venues, 40 bingo halls, 6 casinos, and 237 arcades.

Yet planning for its IPO, dealmakers view CIRSA’s value to be outside of Spain, where the company has significantly expanded its casino, arcade, and sportsbook properties in the markets of Colombia, Mexico, Peru, and Puerto Rico.

Despite returning CIRSA to growth, Blackstone’s investment has been weighed down by consecutive years of refinancing the Spanish group’s long-standing debt of €2.3bn, with debt bonds traded on London markets since 2023.

Regulatory changes across South American markets see dealmakers view 2024 as the optimal time for Blackstone to divest CIRSA.