Global Target .22 Although taken from a article 3 months ago, global breaks down the key take aways from PYD
Key takeaways for investors include: (i) The backing of a large well capitalized gaming finance company is a validation of Poydras’ business model; (ii) Provides Poydras with a good source of non-dilutive financing; (iii) Gives the company the opportunity to expand both within its core Oklahoma market as well as explore potential opportunities in other markets like Louisiana and Illinois; (iv) Ability to scale its footprint fairly quickly given the complementary nature of both businesses (both companies are familiar with gaming licensing rules, have vendor relationships, PYD’s Oklahoma infrastructure allows for plug and play); (v) Positions Poydras as a potential take-out candidate.
Mergers & Acquisition activity has been quite brisk in the gaming industry over the past 18 – 24 months as companies acquire competitors to shore up market share. Suppliers are seeking distribution partners/customers with scale and footprint especially in highly regulated markets like native gaming where barriers to entry are high (onerous licensing requirements, long lead time to build relationships, lack of access to capital). If Poydras can scale to a 5,000 plus machine footprint it could potentially become a take-over candidate.