The PointsBet Holdings Ltd (ASX: PBH) share price will be one to watch on Tuesday.
This follows the release of an acquisition announcement by the sports betting company this morning.
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What did PointsBet announce?
This morning PointsBet announced that its wholly owned Irish subsidiary, Lockspell Limited, has entered into a binding share purchase agreement to acquire Banach Technology. The transaction remains subject to customary completion conditions and is expected to close in April.
According to the release, PointsBet will acquire Banach Technology for US$43 million on a cash and debt free basis. This will be paid 55% in cash and the remainder in PointsBet scrip (1,752,875 shares).
In addition, the company intends to provide Banach Technology with US$4 million in funding to assist in the conversion process of existing equity options. However, this amount will be retained by PointsBet post completion of the transaction.
What is Banach Technology?
Banach Technology is a Dublin-based provider of proprietary risk management platforms and quantitative driven trading models. These platforms and models support complex pre-game and in-play betting products across numerous sports, including the four major American sports and international soccer.
The release explains that the Banach Technology team is deeply experienced, particularly in leading pre-game and in-play sports wagering markets. They previously established the Quants division of Paddy Power.
Management notes that the acquisition will position PointsBet as a leader of in-play sports wagering in the United States. This comes at an important time, as in-play wagering is expected to grow exponentially. In fact, within the next 3 years, it expects in-play wagering to represent ~75% of all sports wagering activity in the United States.
"Delighted"
PointsBet's Group CEO and Managing Director, Sam Swanell, commented: "We are delighted with the acquisition of Banach and that its well credentialled team have agreed to join PointsBet. As legalisation to approve US sport betting accelerates across the US, it has become clear that the in-play opportunity will be very significant and those with the best depth and breadth of product will win."
"Technology is at the forefront of everything we do at PointsBet and we have undertaken an in-house approach to proprietary technology as the key priority. In Banach we have found a like-minded team of technologists and the acquisition is a preferable approach to developing our in-play capabilities organically, given it allows us to dramatically ramp up our speed to market while still allowing us to own market leading technology and continue to control our destiny," he added.
