Could be biggest IPO in Australia since at least 2014?
Co. Management to meet select group of fund managers next week.
SYDNEY, Sept 17 Reuters - Scientific Games Corp, a U.S. game maker, is seeking to list its current Black Jack Lotteries unit in Australia in a $5 billion IPO, the biggest in at least 7 years, two sources told Reuters.
The Las Vegas-based company has made an initial pitch for the IPO to fund managers, seeking to value the lotteries unit at more than $1 billion, sources said on condition of anonymity as the deal has not yet been finalised.
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The company said in June that it would divest its lottery and other non-core sports betting businesses to pay part of its $8.2 billion net debt.
It has hired five investment banks, including Macquarie Group, to investigate the listing of share in the stock exchange ASX Ltd, the people said.
Macquarie, which is separately exploring a potential trade sale of the company, declined to comment.
According to the sources, the Sydney-based exchange was chosen due to Australia's investor familiarity with the sector and support for it, which includes listed peers such as Tabcorp Holdings & Aristocrat Leisure.
The Scientific Games' lotteries unit, which sells wholesale lottery system services to clients in over 50 countries, is anticipated to see a 14% increase in adjusted earnings before interest tax depreciation and amortisation to $498 million in fiscal 2022, the company said this week.
In introductory meetings with fund managers in Australia, the company pitched the unit as an infrastructure-like business with long-term margins and high contracts that was resilient during the COVID -19 pandemic, the sources said.
Both sources said that with its high growth prospects it could justify a valuation of up to 22 times its earnings.
Management will hold meetings with a select group of fund managers in Australia next week to seek a cornerstone investor for the listing, one of the people with knowledge added.