Italy's Lottomatica eyes IPO as Q4 core profit rises at least 7%

MILAN, Jan 25 (Reuters) - Italian gaming company Lottomatica said it was considering a potential public listing among strategic options to support growth, as it reported a rise of at least 7% in pro-forma fourth quarter core profit excluding the acquisition of Betflag.

An initial public offering, which sources had told Reuters could take place in the second quarter, would help to leave behind a dry spell in the IPO market which suffered in 2022 as inflation and high interest rates stoked volatility.

Backed by Apollo Global Management (APO.N), Lottomatica has been working on the possible IPO with UniCredit (CRDI.MI), Goldman Sachs (GS.N), Barclays (BARC.L), Deutsche Bank (DBKGn.DE) and JPMorgan (JPM.N).

Credit Suisse (CSGN.S) has also now joined the consortium, a source with knowledge of the matter said.

Lottomatica gave no further details on the plans on Wednesday.

It said preliminary results for 2022 showed that it had collected 22.8 billion euros in bets, with revenue of around 1.4 billion euros and earnings before interest, tax, amortisation and depreciation of 458 million-462 million euros.

Pro-forma EBITDA stands at 516 million-520 million euros in 2022 when taking into account the acquisition of Italian remote gaming and betting collection company Betflag, which Lottomatica completed in November.

In the fourth quarter, Lottomatica's EBITDA rose 7-11% year-on-year excluding Betflag.

Apollo Global Management entered the Italian gaming business in 2019 when it bought a large stake in Gamenet and proceeded to buy out other investors and delist it the next year.

The private equity firm invested a further 950 million euros in the sector the following year when Gamenet acquired IGT's (IGT.N) Italian gaming machine, sports betting and digital gaming businesses.

These businesses were housed in two companies dubbed Lottomatica Videolot Rete and Lottomatica Scommesse, with a valuation at the time of around 1.1 billion euros including debt.

Gamenet was then renamed Lottomatica.

The IPO market is thawing and Italy's EuroGroup Laminations, a maker of electric motor components, this month said it planned to launch a share offering in Milan as early as February.

($1 = 0.9203 euros)

Reporting by Elisa Anzolin, editing by Valentina Za and Emelia Sithole-Matarise

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