One of Canada’s largest gambling operators, Gateway Casinos & Entertainment Ltd is exploring an initial public offering or sale, said sources familiar with the matter. British Columbia-based Gateway is simultaneously considering both options to determine which would yield the highest valuation.
Backed by private equity firm Catalyst Capital Group, Gateway has hired Canadian Imperial Bank of Commerce, Morgan Stanley and Credit Suisse Group AG to advise on the potential IPO. Morgan Stanley also is advising on a possible sale. Gateway is said to prefer an IPO this year to potentially raise up to $329 million, which would value the company at $2.05 billion. Proceeds from an IPO would be reinvested in new and existing properties. However, no final decisions have been made, and Gateway also could change its plans, sources said.
In 2015, Toronto-based Catalyst considered an IPO for Gateway, but lack of investor interest in new issuances in Canada ended any action. In 2012 Catalyst attempted to take Gateway public but withdrew that offering. Eventually Gateway issued $791 million in new debt to refinance its borrowings and issued a special dividend to fund an expansion into Ontario.
Last December, the Ontario Lottery & Gaming Corporation selected Gateway as the service provider for several casinos and slots in Northern and Southwestern Ontario. Today Gateway operates 26 gaming facilities with more than 6,100 employees in British Columbia, Alberta and Ontario.
