BlueBet IPO bookbuild ‘covered’ for initial public offering

BlueBet executive chairman Michael Sullivan, left and CEO Bill Richmond, at Randwick racecourse in Sydney.

Bookmaker BlueBet has been met with overwhelming demand for its initial public offering where it will raise $80 million at $1.14 per share.

BlueBet has been carrying out a cornerstone process to lock in early investor support, and it is understood that the demand has been overwhelming, with bidders for the cornerstone component of the deal now likely to be scaled back due to the overwhelming popularity of the business.

The bookbuild opened on Tuesday and and investors will be advised of their allocations next Monday.

DataRoom revealed BlueBet’s listing plans on February 4.

It is a profitable online sportsbook operation founded by Michael Sullivan in 2015 and investors have been told that the debt-free company has sustainable growth and strong margins.

It has at least 80,000 registered customers, 25,000 of which were active last year.

The funds raised from the listing will help to grow its Australian operations and enter the United States sports wagering market.

Currently, its share of the online wagering market is 0.6 per cent.

Revenue has increased 63 per cent in the past year to $267m last year, as the number of bets placed surged in the last three months of 2020.

When it lists on July 2 on a normal settlement basis, the company’s market value will be $228.1m and including debt, will be $178.5m.

Working on the IPO are Morgan’s and Ord Minnett.

The pricing equates to 4.9 times the group‘s revenue for 2021 including debt.

Meanwhile, also heading to the market is Lumos Diagnostics Holdings with hopes to secure about $60m at $1.25 per share.

The market value of the business will be $184.7m and the enterprise value $140.3m.

Working on the float is Bell Potter and Wilsons.