Cirsa announces €400m IPO to help fund future M&A
Spanish operator Cirsa has announced its intention to proceed with an IPO on Spanish stock exchanges, and expects to raise €400 million ($460.4 million).
Announced on Wednesday, Cirsa’s IPO will involve a primary offering of newly issued ordinary shares, aiming to achieve an equity raise of €400 million to accelerate its growth strategy and strengthen its capital structure.
The IPO will also help fund future M&A plans, as the company expects to continue its bullish acquisition strategy.
Since 2015, Cirsa has completed over 130 acquisitions, including a move to take a 70% stake in leading Peru operator Apuesta Total in 2024, before then entering Portugal by securing a 68% stake in Casino Portugal.
The company is expecting shares to be admitted for trading on Barcelona, Bilbao, Madrid and Valencia stock exchanges, although the definitive date for the submission is subject to factors such as market conditions and approval from the Spanish Securities Market Commission.
Cirsa believes it is well-placed strategically to capitalise on growth opportunities, having achieved EBITDA growth for 67 consecutive quarters, excluding those impacted by Covid-19 (likely 12 quarters between Q1 2020 and Q1 2022).
Cirsa Executive Chairman Joaquim Agut described Wednesday’s announcement as a “significant milestone” for the company, while CEO Antonio Hostench also shared his excitement for the move.
“Today, we are taking a defining step to continue writing another page in this extraordinary history of growth by announcing our intention to go public, which will provide us with the opportunity to undertake new projects and continue to consolidate our leadership in the sector,” Hostench said.
Both Agut and Hostench will retain their Cirsa investments and remain shareholders following the IPO.
Secondary sale of shares planned
A secondary sale of around €60 million in shares will be carried out after the IPO, for the purposes of settling taxes and other expenses linked to the restructuring of management holdings.
The secondary sale will be conducted by LHMC Midco and is solely for the indirect benefit of certain current and former employees, as well as managers. Cirsa stressed management won’t receive any cash proceeds, other than those diverted towards paying taxes and expenses.
Cirsa’s plans also include a customary over-allotment option granted to joint global coordinators Barclays Bank Ireland, Deutsche Bank Aktiengesellschaft and Morgan Stanley Europe.
Cirsa 2025 earnings expectations
Alongside accelerating the company’s growth strategy, Cirsa says the primary offering will repay existing debt, expecting it to reduce the group’s net leverage ratio to around 2.7x.
The company has forecast a 2025 EBITDA range of between €740 million and €750 million. For online operations, it expects EBITDA to come in at slightly higher than 2024.
In the medium term, CIRSA expects net operating revenues in the land-based business to grow in the mid-single-digit area and online gaming to grow by double digits. It is targeting net operating revenues of between €2.28 billion and €2.33 billion by the end of 2025.
It is aiming for its net debt to EBITDA ratio to be between 2.0x to 2.5x post IPO.
In the 2025-2027 period, Cirsa aims to have further capacity for M&A investment with organic cash flow generation of €400-500 million.
Cirsa IPO plans follow on from strong Q1
Rumours of Cirsa’s IPO had been circulating for some time, but the IPO launch confirms its plans to capitalise on its recent strong performance.
Founded in Spain in 1978 and acquired by Blackstone in 2018, Cirsa now holds a presence in 11 countries, including Spain, Panama, Colombia, Peru, Mexico, Costa Rica, the Dominican Republic and more recently Portugal.
In Q1 it recorded a net operating revenue of €576.7 million ($164.5 million), a 12.5% increase when compared to the same quarter last year.