Italian gaming company Sisal group will have a market cap between 645.5 and 789.25 million euros on the Italian Stock Exchange (see a previous post of BeBeez), as the global offer price range has been fixed between 6.3 and 7.7 euro per share. This means that Sisal’s enterpise value might be over one billion euros  (download here the press release).Emilio Petrone and Corrado Orsi, respectively ceo and cfo of the company among the main operators in the gaming and payment services business in Italy, told yesterday in a press conference that the global offer will regard 77.5 million shares of Sisal (equal to 59.16 pct stake in the shareholders’ capital) and that thedeal is 90% made by an institutional offer which started yesterday and 10% made of a public offer starting today. Both the offers will end next July 14th and the first day of trading is expected to be July 18th.
The two managers told that 49 million shares out of the 77.5 millions of the global offer will come from actual shareholders’ portfolio; Sial is controlled by private equity funds Apax (36,5%), Permira (36,5%) and Clessidra (20%, through Gaming Invest sarl. WHile 28,5 million shares will come from a capital increase 179.5-219.5 million euros capital increase. Moreover a greenshoe option is included in the offer on other 11.625 million shares. This means that In case of full exercise of the greenshoe option, the total number of shares placed will be 89,125 millions representing a free float of 68.03% of the share capital.
The company told last June 17th (download here the press release) that ipo’s proceeds will be used  to restructure the Sisal group’s indebtedness  through  the effects of the selling shareholder’s waiver of  the shareholder loans granted to the Company and the use of the eventual other proceeds to the company to redefine its existing indebtedness.
More in detail, the ipo prospectus (download here the prospectus) explains that thanks to the ipo proceeds, Gameing Invest sarl will cancel its two shareholders loans to Sisal which at the end of last March amounted to 464.8 million euros (from 450.1 millions at the end of December 2013) paying a10.6% average interest rate, Moreover, proceeds from the capital increase will be used by Sisal for two thirds of the total to repay some of the existing credit lines andfor the rest  to go on with its m&a strategy (in the last 3 years Sisal acquired 9 companies).
All that means that after the ipo the debt cover ratio will go down to 2.4-2.6x Sisal’s ebitda from actual 6.1x, Sisal’s net financial debt being 1.107 million euros at the end of last March with a 12-months adjusted ebitda of 180.3 millions (up from 175.5 millions in 2013). These figures imply then an enterprise value of 1.1-1.25 billions.
A lower net financial debt will result in lower interest rates expenses: those were 86.8 million euros last year, 49 millions of which due to the shareholders loans’ costs. So the bottom line is that the company shoud be more profitable in the next future and infact the two managers told that the compny will come back to produce nte profits in 2015. This year instead there will be a loss again after three years of losses ( 99 millions in 2013,  38.8 millions in 2012 and 29.5 millions in 2011)  due to non-recurring  items (especially expenses deriving from sanctions levied by regulatory entities). However ebitda is seen growing up thanks also to higher revenues after three years of drops thanks to new products (the company is launching now the new lottery “Vinci casa”).
Deutsche Bank and Ubs are global coordinators and act also as joint bookrunners with Unicredit and Banca Imi, while Lazard is advisor to Sisal for the deal.
