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Aspire Global has been accused of breaching business contracts by the Co-Founders of BtoBet.
A legal challenge filed in the High Court of England & Wales has been brought against Aspire Global, the former Stockholm Nasdaq igaming platform and solutions provider acquired by NeoGames in 2022 for €400m.
The legal dispute, initiated by BtoBet Co-Founders Alessandro Fried (CEO) and Igor Lestar, alleges that Aspire breached the terms of the Share Purchase Agreement (SPA) agreed upon for its €20m acquisition of BtoBet in June 2022.
Fried and Lestar claim that Aspire neglected specific SPA obligations related to how it valued the earnout incentives attached to the acquisition of BtoBet.
The terms of the deal, finalised in September 2022, saw Aspire commit to a €15m cash payout with a €5m earnout reward based on BtoBet’s performance over a 12-month period following the closing date of the deal.
Identified as a point of conflict was the calculation method for earnout considerations applied by Aspire, which the claimants allege was purposely used to lower the 2022 EBITDA results of BtoBet.
The filing states that “BtoBet incurred costs in 2022 for developing services that would generate revenue after 2022, this arrangement would disproportionately benefit the buyer by reducing the Earnout Consideration for any amount above €20m.”
The claimants assert that these services should have been factored into the Earnout Consideration since “the buyer would stand to benefit from 100% of the revenue generated from this investment in the years following 2022.”
In its legal response, Aspire denies breaching any SPA obligations related to Earnout Considerations, claiming it had allowed BtoBet significant “latitude and autonomy” to achieve its incentives.
Following its acquisition, Aspire noted significant challenges faced by BtoBet – stating: “Unfortunately, after the SPA was concluded, it became apparent that the company’s products were not fully fit for purpose, that it was under-resourced and under-staffed, and that not all of its business practices were sustainable, either in the markets in which it was already operating or the markets it intended to operate in post-acquisition.”
Aspire contends that the claimants’ failure to meet the Earnout Consideration was solely due to BtoBet’s underperformance during the 12-month period post-acquisition.
While acknowledging that BtoBet secured future services, Aspire noted that “the functionality of the Sportsbook Platform meant that the defendant’s customers were unwilling to use it and the defendant suffered a material loss of revenue in executing the transition to the Sportsbook Platform.”
On deal earnouts, Aspire cites that the owners of BtoBet had “bullish projections about the company’s future performance and might not meet those projections.”
Aspire’s legal response concludes by characterising “Mr. Fried and others as having been motivated by short-term interest in being paid the Earnout Consideration rather than building relationships”.
