PointsBet Holdings has announced that its Lockspell Limited wholly owned Irish subsidiary has entered into a binding agreement to acquire sportsbook solutions provider Banach Technology.
Under the agreement, PointsBet will pay US$43.0m to purchase Dublin-based Banach on a cash and debt-free basis, with 55% of this to be paid in cash and 45% in shares.
PointsBet also agreed to provide Banach with $4.0m in funding to assist with the conversion process of existing equity options, with this amount to be retained by PointsBet after the acquisition completes.
Subject to customary closing conditions, PointsBet said that it expects the deal to go through next month.
Founded by former Paddy Power employees Mark Hughes, Alex Zevenbergen, Rob Reck and Hadrien Lepretre, Banach provides proprietary risk management platforms and quantitative driven trading models for sportsbook operators.
Banach currently works with sportsbook brands around the world, employing a team of 40 technology and product staff. PointsBet currently operates using its own betting technology platform.
According to PointsBet, the acquisition will support its ongoing expansion plans in the US, while it also said Banach’s expertise in sophisticated risk management algorithms and deep trading will allow it to optimise achieved margin and offer more value to customers.
“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,” PointsBet chief executive and managing director Sam Swanell said.
“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.”
Should the deal go through as expected, Banach’s quartet of founders would take on new roles within the expanded PointsBet business.
Hughes would become chief operating officer of PointsBet, while Zevenbergen would move into the role of vice president of engineering for the operator’s trading platform.
In addition, Lepretre would serve as vice president of quantitative analytics, and Reck as product and technology advisor to PointsBet.
Reflecting on the deal, Hughes said: “We could not be more excited about the burgeoning US opportunity and the role that the Banach team will play in accelerating and strengthening PointsBet’s pre-game, in-play and free-to-play offering in the US.”
The deal come after PointsBet in January reported a year-on-year increase in turnover and revenue for the first half of its 2020-21 fiscal year, though high advertising spend and R&D investment hit its bottom line.