Italian gambling firm Lottomatica has announced that it has priced its shares in its initial public offering (IPO) at the lower end of its target range, at €9 ($9.93). As a result, the company is set to debut on the Milan Stock Exchange on 3 May with a market cap of €2.27bn. The provider offers wagers on sports and other events both online and in-store across Italy.
Aiming for a Mid-Point Core Profit of €560m
Despite its ambitions, Lottomatica has fallen short on its IPO, with the price set at the bottom of the target range. However, the company is aiming to deliver a mid-point core profit of €560m this year.
Its 2022 financial report showed that revenue growth pushed the business into profitability during its first full year of trading since the company’s acquisition, with Lottomatica reporting a net profit of €79.3m.
Lottomatica is owned by private equity firm Apollo Global Management, with the free float equal to 26.5% of the share capital, but it could rise to 30.5%. The IPO, which ran from 24 to 27 April, aimed to raise €600m, consisting of €425m of newly issued stock and €175m of shares to be sold by existing investor Gamma Topco.
Gamma granted investment firm Goldman Sachs an option to purchase nearly 20 million additional shares, to be exercised during a period of up to 30 days after the shares start trading on the Euronext Milan exchange. This amounts to around 15% of the total number of shares on offer.
Implications for the iGaming Industry
The Lottomatica IPO has important implications for the iGaming industry. First, the pricing at the bottom of the target range shows that investors are still cautious about investing in online iGaming industry companies.
Second, the fact that Lottomatica is backed by private equity firm Apollo Global Management underscores the significant role that private equity firms are playing in the gambling industry.
Third, the decision to grant Goldman Sachs an option to purchase additional shares is a sign that there is still significant interest in investing in the iGaming industry, despite concerns about the regulatory environment.