IG Group, the London-based online trading behemoth has just announced plans to acquire a US-based and regulated online brokerage and trading education platform, Tastytrade, that has a “leading position in US listed derivatives, primarily options and futures, and over 105,000 active accounts” according to an official press release.
The acquisition would expand IG’s presence in the US following several key acquisitions and launches in the past few years, including the purchase of online daily education and news portal DailyFX and the launch of a fully licensed retail FX offering for US customers in 2019. To that end the company indicated that “the transaction significantly increases the scale and relevance of IG’s existing US business through the acquisition of a fast-growing, high margin business that is well positioned to benefit from the structural growth in self-directed investing in the US listed options and futures market.”
The deal is said to be worth $1 billion with $300 million allocated in cash and the rest in IG shares of 61 million in total, valued at $700 million. The company also indicated that “key tastytrade management shareholders, comprising Tom Sosnoff (Co-CEO, tastytrade), Kristi Ross (Co-CEO and President, tastytrade), Scott Sheridan (CEO, tastyworks) and Linwood Ma (CTO, tastytrade), will join the IG senior leadership team and continue in their current roles to help drive further growth in the business, and will collectively own approximately 5.7% of the enlarged share capital of IG.”
June Felix, Chief Executive of IG, commented, “I am thrilled to welcome tastytrade to the IG Group family. This acquisition will materially expand and scale our business in the US and see us further diversify into the exciting high growth market of US retail options and futures, a market which is adjacent to IG’s core retail trading skill set. The US market has more than 1.5 million retail traders and is the largest derivatives market in the world. tastytrade has grown impressively and proven itself to be an innovative market disruptor passionately committed to delivering for their clients. The financial and strategic rationale underpinning this deal are compelling. I am confident that with our shared client-centric ethos, passion for innovation and growth, IG and tastytrade will prove a winning combination.”
Tom Sosnoff, Co-Founder and Co-CEO of tastytrade, commented, “Early on we knew tastytrade was a very special company. While our long-term goal has always been to go global, we waited almost 10 years until we found the right partner and perfect match. Together we will focus on empowering the self-directed investor and change the way people perceive and engage with financial markets.”
According to the press release, tastytrade was founded in 2011 with a focus on trader education and original content, alongside its sophisticated brokerage offering, provides a clear competitive advantage over peers. With 900,000 unique registrants, tastytrade is one of the most watched financial networks in the world, engaging traders across 190 countries, with 8 hours of cost-free, commercial-free, live interactive content daily, providing market commentary and actionable trading strategies related to options and futures trading and the stock market.
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