SBTech must create $30m cyber attack fund for DraftKings deal
As a result of a cyber attack on its partners, SBTech has to set aside a fund of $30m to compensate for any damages in accordance with its DraftKings deal.
Diamond Eagle Acquisition Corp. (DEAC), the acquisition company heading DraftKings’ acquisition of SBTech, detailed the new obligation in an additonal indemnity clause on the deal’s contract.
The cyber attack shut down a number of SBTech’s partner sites last month for approximately six days.
However, the supplier ensured that due to the coronavirus pandemic causing mass sporting cancellations, the impact of the downtime was minimal for partners on the revenue side.
According to the new clause, SBTech owners will need to set aside $30m of the $600m being paid in the deal to be held in escrow for two years.
If compensation costs exceed this $30m amount, the DEAC is able to also use funds from the previously arranged $25m escrow and $45m in shares.
The DraftKings – SBTech deal is expected to close in the first half of 2020.
It is anticipated the combined company will have a market capitalisation of approximately $3.3bn, with over $500m of unrestricted cash on the balance sheet.
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