DraftKings CEO downplays M&A talk as Jackpocket integration takes priority
Jason Robins says efforts needed to digest two companies at once would be “very challenging” as he insists focus is on organic growth
DraftKings CEO Jason Robins has poured cold water on any imminent M&A moves as the Boston-based giant digests its $750m acquisition of Jackpocket.
Speaking on an analyst call last week following the publication of the group’s Q1 results, Robins said the available capital, which sits at about $1.6bn, would not be funnelled into acquisitions in the near future.
The DraftKings co-founder did note that the funds could be used for “organic investment” or “other methods of returning capital and creating value for our shareholders” outside of snapping up other firms.
DraftKings agreed to a $750m deal to acquire lottery courier app Jackpocket in February. This is due to conclude in H2.
With that process ongoing, including seeing CFO Jason Park transition to his new role as chief transformation officer, Robins was quick to put a dampener on any further inorganic growth.
He said: “We have a very high bar for M&A. We understand there’s lots of ways that we can deploy capital to return value to shareholders.
“I do think M&A will be a lever for us, but we’re also practical. To do materially sized transactions simultaneously would be very challenging. So, that’s certainly something that we weigh in our mind.
“We feel like our organic growth path is really strong right now. So, we don’t feel particularly compelled to do M&A as a source of growth. We understand that the integration and other work required with M&A is actually a distraction from that organic growth.”
Robins did note that the business would “never say never” to any potential deal, but the focus for the company was away from acquisitions for the time being.
He continued: “I think two [acquisitions] at exactly the same time would be challenging. I think for us, we look at capital allocation as a broader question as well as a resource and time allocation. We don’t just look at it and [think] M&A is the answer on that.”
Away from DraftKings’ M&A plans, the operator revealed Q1 revenue was up 53% year on year to $1.2bn, which was augmented by a 23% spike in monthly unique players.
As a result, management increased their full-year 2024 expectations across both revenue and EBITDA.