Nestled away in a winegrowing region in the woods surrounding Vienna is one of Austria’s fastest growing companies. Novomatic operates casinos, gaming machines and online betting and is among the fastest-growing companies in Austria.
The firm, present in 80 countries around the world, is now gearing up to go public, possibly in the second part of the year.
The move could generate €1.5 billion, or $1.6 billion, but Novomatic won’t finalize its plans until summer and when approached, declined to provide further information. A spokesperson said: “We have been active with bonds on the capital market for years and have diversified capital market financing. At the moment, there are no concrete decisions on additional financing projects.”
The Austrian group, with 29,000 employees, is worth €6 billion, according to Bloomberg’s estimates.
Much remains unclear about the IPO. The release will be guided by Bank of America and Credit Suisse, and is slated for Frankfurt and possibly also Vienna, according to informed sources. No information is available about how the trading of Novomatic stocks will be distributed following the flotation, but Frankfurt is likely to be the main focus with Vienna the “downstream trading platform.”
Vienna, though, is fighting for more. Keen to cut departures, a team from the Vienna Stock Exchange is in contact with Novomatic. “The best place for Austrian companies is the Vienna Stock Exchange, because they get the greatest attention there and they’re also listed in our leading index,” an exchange spokesperson told Handelsblatt. It would be the country’s highest profile IPO in a decade.
Company insiders say Novomatic doesn’t necessarily need to go ahead with a flotation. “We have a billion euro line of credit we can call on,” they said. But financial sources say the flotation will most likely take place following Germany’s election on September 24 when the markets are likely to be more stable.
According to Novomatic’s own statements, it is one of the largest high-tech gaming technology companies worldwide and focuses on the digital possibilities of games of chance. The company was founded in 1980 by Johann F. Graf, whose wealth amounts to €8 billion, according to Forbes. Mr. Graf, a butcher by trade, is the second-wealthiest Austrian after Red Bull founder Dietrich Mateschitz.
Mr. Graf’s family now owns almost all of the company’s shares and his son, Thomas Graf, is a board member and chief technology officer. The company operates over 1,800 of its own electronic casinos and regular casinos as well as 260,000 gaming terminals and video lottery terminals through rental models.
In Austria, the company recently bought shares in Casinos Austria and Österreichische Lotterien, a lottery firm. To finance its aggressive growth, Novomatic last year floated a bond issue with a volume of half a million euros. The company’s turnover reached nearly €2.3 billion last year, partly thanks to acquisitions worldwide, and operating profits hit €589 million.
The flotation would be good news for Frankfurt where the only notable IPO this year was e-mobility specialist Aumann. In the same period, its rival the London Stock Exchange managed eleven IPOs with a volume of $2.1 billion. So a Frankfurt listing for Novomatic would also spell prestige for Deutsche Börse, the operator of Frankfurt’s stock exchange.
Investment bankers and IPO consultants expect Germany’s IPO scene to bounce back in the second half of the year. According to consultant EY, ten IPOs are likely in 2017. As ever, the German market needs time to gain momentum, said Martin Steinbach, the executive director at EY responsible for IPOs, but there are several promising candidates on the starting blocks.
Handelsblatt’s Peter Köhler writes about banks, private equity, venture capital and corporate funding. Hans-Peter Siebenhaar is Handelsblatt’s Austria correspondent. To contact the authors: firstname.lastname@example.org, email@example.com