Boyd Gaming Corp. announced that its wholly-owned subsidiary, Boyd Interactive Gaming Inc., has entered into a definitive agreement to acquire internet gaming technology supplier Pala Interactive LLC and its subsidiaries for total cash consideration of $170 million.
Pala Interactive is an innovative online gaming technology company that provides proprietary real-money and social gaming solutions on both a business-to-business (B2B) and business-to-consumer (B2C) basis in regulated markets across the United States and Canada. Pala Interactive’s technology includes its player account management system; plus casino, poker and social casino platforms.
Pala complements its online gaming platform with a full suite of managed services. Pala currently provides B2B services in eight states across the United States as well as Canada, and operates B2C offerings in New Jersey and Canada.
“The acquisition of Pala Interactive marks the next phase in the ongoing execution of our iGaming strategy, providing us full control over the technology, development and customer experience,” said Keith Smith, president and CEO of Boyd Gaming. “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, driving growth in both our land-based and iGaming operations.
“Given our nationwide geographic distribution, significant database and established loyalty program, it makes sense for us to pursue a direct approach with our iGaming operations. 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.
“While the acquisition of Pala Interactive supports our iGaming strategy, we remain fully committed to our sports betting partnership with FanDuel, which has allowed us to participate in the nationwide expansion of sports betting. We look forward to welcoming the Pala Interactive team to our company and building a highly successful online gaming business in the years ahead.”
The transaction is expected to close by the first quarter of 2023, subject to customary closing conditions and the receipt of all required regulatory approvals. The transaction will be financed with a combination of cash on hand and the company’s existing credit agreement.
Jefferies analyst David Katz says the deal is tied to Boyd’s desire to establish its Stardust brand as an online gaming option.
“Boyd will migrate the Stardust business, which is currently operated by FanDuel, in-house and integrate it with its B Connected loyalty system,” Katz wrote in a note to investors. “The company indicated its current digital operations, which included mobile sports-betting in six states, iGaming in PA and NJ, and Social gaming, generated $24M in EBITDAR in FY21 and should exceed $30M in FY22.”
Katz says the acquisition will be “neutral for the shares, given it fulfills Mgt. indication of continued build-out of BYD’s iGaming business long-term and consumes a moderate amount of capital in the near term.”
