We expect that the consolidation of Pariplay will have a major impact on the fourth quarters&#39; top-line. We estimate that Pariplay will add around EUR 2.8m in sales. For the B2C segment, we expect the negative momentum to continue with a negative Y/Y growth of -12%. We believe the main reason for the negative B2C growth is the increased focus on the B2B segment.
On the cost side, we expect increased expenses, mainly due to the addition of Pariplay. We expect some extra expenses for the transaction and the integration work. Moreover, we expect increased marketing expenses Q/Q for the B2C segment. As a result, we believe the EBITDA margin will drop compared to the third quarter (-1.5pp). Moreover, the company has communicated that the retroactive tax will be included as an exceptional item in the accounts for 2019, which will have a major negative impact on the EPS.
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Outlook 2020
Despite the setbacks in the earnings at the end of 2019, we expect a strong 2020. The Pariplay acquisition and the increased focus on B2B should continue to drive growth. We also expect that synergies will improve the margins. We will look extra closely at the player KPIs and any comments regarding new B2B customers in the Q4 report, as these will determine the underlying momentum entering 2020.
Attractive valuation 
Aspire Global&acute;s stock price has dropped about 10% since the last report due to poor news flow with the large retroactive tax item as the main negative. However, we view the company as attractively valued with an EV/EBIT multiple of around 6x for 2020E, which is far below its peers despite a strong long-term outlook. Furthermore, the company&acute;s financial position remains strong, and we believe that additional acquisitions during 2020 are likely.
Summary
We expect strong growth in the fourth quarter due to the Pariplay acquisition. On the cost side, we expect one-off items to impact the profit margins negatively. The outlook for 2020 remains strong, and the current valuation is very attractive.
We will get back with a comment following the release of the report.