IG Group to Buy Tastytrade Inc in $1bn Deal

Global online trading platform IG Group (LON: IG) announced this morning that it is set to acquire US online trading platform tastytrade Inc.

(Ah, so that’s where all the commission I paid went!)

Wanna know how much they’re paying for this?

In the words of Justin Timberlake in the Social Network…

A billion dollars

That’s how much IG are paying.

The deal represents IG’s largest-ever acquisition, with the company set to pay $300 million in cash and 61 million shares valued at $700 million.

It provides IG with the opportunity to gain a foothold in the US futures and options market, which has seen an influx of retail traders since the coronavirus pandemic.

“This acquisition will materially expand and scale our business in the U.S. and see us further diversify into the exciting high growth market of U.S. retail options and futures, a market which is adjacent to IG’s core retail trading skill set.

"The U.S. market has more than 1.5 million retail traders and is the largest derivatives market in the world,” commented June Felix, Chief Executive Officer of IG Group.

Record Profits

The acquisition comes after a solid year for IG. The company also released its H1 FY 2021 results on Thursday, reporting a record performance…

Revenue was up 67% to £416.9 million while pre-tax profits rose 129% to £231.3 million.

Active clients also increased 55% to 238,600 with 64,000 new clients onboarded.

Commenting on the results, Felix said: "I am delighted to announce an outstanding performance over the first six months of our financial year. We delivered record revenue and profit, made excellent progress against our strategic growth objectives and continued to build a more sustainable and diversified global business.

“Demand for our products remained high, benefitting from favourable trading conditions, although it is the quality of our technology and the dedication of our people, throughout the global pandemic, that has enabled us to convert this demand into a step change in the size of our active client base.”

IG’s shares traded as low as 847.5p following the announcement but are now sitting at 877.5p, down 2.91%.