SBTech agrees to indemnify DraftKings and DEAC15th April 2020 9:14 am GMT
The owners of sports betting technology supplier SBTech could lose up to $30m due to the suspected cyberattack on the company’s systems in late March.
The terms of the business combination agreement between SBTech, Diamond Eagle Acquisition Corp. (DEAC) and DraftKings have been amended to protect DEAC and DraftKings against any future claims that may arise from the incident.
To indemnify its new partners, SBTech has agreed to place $10m of the cash consideration due to the company’s owners into escrow for a two-year period following the transaction to settle any claims.
SBTech’s current owners will also see $20m in options locked-up for two years to cover certain indemnification obligations.
The remaining cash and shares after settlement of any claims will be returned to SBTech’s owners after two years, while any shortfall will entitle the combined business to additional recourse.