The global lotteries unit of Las Vegas-based Scientific Games Corp is thought to be close to launching an Australian initial public offering that could raise up to $3bn. The IPO, which is slated to begin within days, would be the country’s largest since 2014.
Scientific Games, which is a global provider of gambling products, expects to raise nearly $1b from cornerstone investors, with the rest coming from other, as-of-yet unknown sources. The share sale process has valued the unit at about 14 times Ebitna.
The chain of events leading to the potential IPO was set in motion last year when the Sydney-based Caledonia group of investors bought a 34.9% stake in Scientific Games from American billionaire Ronald Perelman.
As early as June of this year, the company announced that it was exploring avenues of divestment, either through merging with a special purpose acquisition company, a sale, or a strategic combination with another business that would relieve some of its debt burdens. Scientific Games’ sports gambling company weas already sold this year to Endeavor Group Holding Company for $1.2bn in cash and stock.
If the IPO to go forward – and there is no guarantee that it will – it could send ripples through the industry. Scientific Games’ lottery arm sells tickets and scratch cards in over forty countries around the world. In the US market, its instant games arm is thought to have 69% of the $101bn market, its retail solutions and systems arm can claim about a third of the $184bn market, and it sits on a 13% share of the $26bn iLottery space.
