Scientific Games Reportedly Considering Australia Listing for Lottery Business

Scientific Games (NASDAQ:SGMS) is evaluating an Aussie initial public offering (IPO) for the lottery byplay the company is provision to divest.

Last week, the gaming equipment producer said it’s parting with the lottery social unit and its Don Best sports wagering arm. It noted at the time the transactions could materialize in the organize of an initial public offering (IPO), a merger with a special aim acquisition company (SPAC), or an outright sale or combining with another firm.

Unidentified sources told The Australian Financial Review that Las Vegas-based Scientific Games is currently inwards talks with Australian investment banks regarding their thoughts on the drawing business organization and a possible itemisation on the Australian Stock Exchange (ASX).

While bankers said it was stock-still very much in the pitching stage, the fact SciGames management is talking to Aboriginal Australian ECM teams is a warm denotation it was considering the ASX-boards as a potential home for the lotteries unit,” reports the paper.

Scientific Games’ sports betting political platform wasn’t mentioned in the article. That could be a ratify the company is sticking with the plan of a possible SPAC deal, spin-off/IPO, or sales agreement to another operator.

Not Surprising Sci Games Considering Australia

This isn’t the foremost time Scientific Games is beingness fastened to Aussie IPO speculation. In May, reports surfaced the troupe was mulling an ASX offering as an boulevard for raising cash in to deleverage its equipoise sheets.

The one-armed bandit political machine producer has ties to the country. For example, get on fellow member Jamie Odell is a well-respected Aussie gaming executive and antecedently ran rival Aristocrat for a decade. He’s also a component part of Caledonia Investments, which cobbler's last twelvemonth purchased a $1 1000000000 bet in Scientific Games from moneyman Bokkos Perelman.

Scientific Games’ Executive Vice-Chair Toni Korsano is also a former Aristocrat executive director and is currently on the boards of Crown Resorts and First Lord of the Treasury Wine Estates — both Australian companies.

There hasn’t been talking of the broader Commonwealth of Australia IPO since the hearsay ab initio appeared inwards too soon May.

Lottery IPO Could Be Big Commonwealth of Australia Deal

Should Scientific Games opt for itemisation its drawing unit inwards Sydney, it would likely follow unity of the largest non-privatization IPOs inwards the country’s history. It would follow potentially larger than prior government-controlled deals, according to The Aboriginal Australian Financial Review.

The lottery unit generated $430 million inward earnings before interest, taxes, wear and tear and amortisation (EBITDA) over the past 12 months. Analysts estimate it could bring to a greater extent than 10 times that as an IPO valuation.

“Jefferies analysts, inward a short letter sent to worldwide equities clients inward Australia cobbler's last week, precious the business organisation at 8 to 12-times EBITDA, or $US3.44 one thousand million to $US5.16 billion,” according to the paper.

The transaction could also be a guide for Tabcorp, which earliest this week said it’s spinning off its keno and lottery operations into a young public company. An estimated valuation hasn’t in time been assigned to the Tabcorp unit.

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