Cirsa’s Strategic Move: An IPO to Propel Growth Through M&A Initiatives
Since 2015, Spanish gaming operator Cirsa has made waves in the market with over 130 acquisitions, and it’s setting its sights on further expansion with a forthcoming IPO. The company has set an initial offering price of €15 per share, targeting a market valuation of approximately €2.5 billion ($2.9 billion).
In June, Cirsa formally announced its IPO plans on the Spanish stock exchanges, following months of speculation in the gaming industry. The company aims to raise €400 million, funds it intends to channel into its aggressive mergers and acquisitions (M&A) strategy.
The IPO is contingent on the approval of the Spanish National Securities Market Commission, following which the offering will commence. Cirsa plans to issue 26,666,667 shares in its primary offering, bringing the total to the sought-after €400 million. Additionally, a secondary sale will permit certain current and former employees to benefit, offering 3,552,113 existing shares valued at around €53 million.
Morgan Stanley Europe, acting as the stabilizing manager, will also be able to purchase up to 4,532,817 additional shares within 30 days of trading, resulting in a maximum potential offering of 34,751,597 shares worth €521 million.
Strategic Objectives Behind the IPO
Cirsa’s IPO comes on the heels of impressive performance metrics, achieving 67 consecutive quarters of EBITDA growth, excluding the effects of the COVID-19 pandemic. After its acquisition by Blackstone in 2018, Cirsa has expanded into 11 international markets, recently entering the markets in Peru and Portugal through strategic acquisitions.
The upcoming IPO is designed to fuel this growth-centric M&A strategy. The anticipated €400 million in equity will empower Cirsa to enhance its capital structure and accelerate investment opportunities. From 2025 to 2027, the company plans to ramp up its M&A efforts, supported by an organic cash flow generation projected between €400 million and €500 million.
As Cirsa’s CEO Antonio Hostench remarked, "This IPO represents a pivotal moment in our journey of growth. It opens doors for new initiatives and solidifies our position as a leader in the gaming sector."
In conclusion, Cirsa’s impending IPO is not merely a financial maneuver; it’s a calculated step towards strengthening its market presence and fostering further acquisitions, which could reshape its future trajectory in the competitive gaming landscape.