Dublin-headquartered gambling software company Banach Technology has been acquired in a $43 million (€36 million) deal by an Irish subsidiary of Australian online bookmaker PointsBet.
Banach is a sportsbook solutions provider that has developed a proprietary risk-management platform and quantitative-driven trading models for operators.
It was founded by Mark Hughes, Alex Zevenbergen, Rob Reck and Hadrien Lepretre, who previously established the quants division of Paddy Power, now Flutter Entertainment. The company employs 40 people.
PointsBet is to pay $43 million to purchase Banach on a cash and debt-free basis, with 55 per cent of this to be paid in cash and the remainder in shares. The deal is being done via its Dublin-based subsidiary, Lockspell.
As part of the transaction, PointsBet has also agreed to provide Banach with $4 million in funding to assist with the conversion process of existing equity options. This amount will be retained by the PointsBet Group following completion of the transaction.
Subject to customary closing conditions, PointsBet said it expected the deal would be completed by the end of April, subject to customary closing conditions.
PointsBet said the acquisition would position the company as a leader of in-play sports wagering in the US.
“This acquisition accelerates PointsBet’s technology roadmap and places the Company in a prime position to take advantage of this growth in sports betting activity in the United States.
“Additionally, through highly sophisticated risk management algorithms and deep trading experience, Banach’s technology will allow Pointsbet to optimise achieved margin and offer superior value to their customers,” the company said.
Banach previously secured €2.2 million in seed funding in July 2018 with backers including Paddy Power co-founders David Power and Stewart Kenny. Others to join in the round were former Paddy Power chief executive Patrick Kenny, ex-chief financial officer Cormac McCarthy and Cormac Barry, who led the group’s Australian division before becoming chief executive of CarTrawler.
US opportunity
“I am extremely proud of the business and team we have built over the last few years. 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 United States. It is great to be part of such a forward-thinking global organisation,” said Mr Hughes, Banach’s chief executive.
He is to become chief operating officer at PointsBet with Banach’s other founders also taking senior roles.
"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," said PointsBet chief executive Sam Swanell.
“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.
