Will Boyd $170 Million Deal For Pala Interactive Spark M&A Flurry?

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Boyd Gaming has acquired technology firm Pala Interactive in a move that could spark further M&A in the online gambling space.

Boyd recently announced the $170 million acquisition as part of its long-term iGaming plan.

The company’s US sports betting strategy will stay the same, based around its partnership with FanDuel Sportsbook.

Who is Pala Interactive?

Pala, led by CEO Jim Ryan, provides online gambling technology on a B2C and B2B basis.

Its tech covers:

Pala is live in eight states and Canada, and generated around $5 million EBITDA in 2021.

The company also runs consumer-facing sites offerings in New Jersey and Canada under the Pala Poker and Pala Casino brands.

What’s in it for Boyd?

Boyd said the acquisition gave it full control over its iGaming strategy.

By integrating online casinos with our existing land-based operations, we will be able to further leverage and monetize our expansive customer database and the amenities of our nationwide portfolio of properties,” said Boyd CEO Keith Smith.

What next for Boyd?

The transaction is expected to close by the first quarter of 2023. It will be financed by cash-on-hand and Boyd’s existing credit agreement.

After closing, Boyd plans to migrate its existing Stardust Casino brand over to the Pala platform.

“By engaging directly with our guests and having the ability to personalize the customer experience, we are confident in our ability to create a cost-effective and profitable regional iGaming business,” Smith said.

Copycat deals?

Although the online gambling sector has been light on blockbuster deals recently, Jefferies analyst David Katz suggested the transaction could spark further M&A.

“The deal provides some broad-based insight for the publicly traded names that have been under significant pressure,” Katz said. “Our view is that conditions and valuations in the market are ripe for more acquisitions of digital names.”

Likely dance partners

Potential M&A dance partners could include:

All have been linked to various deals in recent months with their share prices tumbling. PointsBet, for instance, has explored a JV with Yahoo Sports.

Meanwhile Regulus Partners analyst Paul Leyland recently suggested DraftKings could merge with a European operator to shore up its cash flows.

As for Genius, the company could be a target for a fellow sportsbook supplier. FansUnite also owns a full-stack platform and recently acquired American Affiliate.