SBTech terms shift in DraftKings deal to cover potential cyber-attack costs
DK parent company maintains access to $30m SBTech cash and shares in case operators ask for compensation
SBTech executives could have up to $30m in cash and shares frozen for a period of two years to cover potential cyber-attack compensation costs.
SEC papers filed by DraftKings’ soon-to-be parent company Diamond Eagle Acquisition Corp (DEAC) yesterday said the $10m in cash and $20m in shares would “cover certain indemnification obligations of the SBTech sellers and holders of cashed-out SBTech options”.
Last week’s cyber-attack left SBTech’s clients without consumer-facing websites for more than 72 hours in the UK.
Sites belonging to its US clients Bet America and Golden Nugget remain closed as they reapply to meet certain state regulations.
The frozen cash and shares will be released to SBTech execs on the second anniversary of the DraftKings/SBTech tie-up deal closing date, providing no unresolved claims remain.
In that case, the DEAC will be able to access an additional $70m of assets locked-up to cover unrelated claims against SBTech.
The DraftKings tie-up is expected to close in H1 2020, after which DEAC will be renamed DraftKings INC and will remain Nasdaq-listed under a new ticker symbol.
In December, the deal valued sports betting supplier SBTech at $700m (£539m).