IG Group is set to buy US online trader Tastytrade in a $1bn cash and shares deal as it continues to dip its toes in the US market.
It marks the London-listed firm’s biggest ever acquisition with Tastytrade shareholders set to receive $300m in cash and 61m IG shares valued at $700m.
The acquisition will allow IG Group to scale in the US futures and options market where trading volumes have reached record levels, but the firm’s share price dipped nearly two per cent by mid-morning.
The trading group has had a presence in the US since 2007 through the Chicago-based derivatives and exchange for US and overseas traders, Nadex.
“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,” IG boss June Felix said.
It comes after a strong year for IG, which offers access to trade over 17,000 financial markets. Market volatility caused by the pandemic has helped drive up trading volumes and its client base.
The FTSE 250 firm today reported record interim results with net trading revenue in the first half surging 67 per cent year-on-year to £416.9m. Pre-tax profits increased 129 per cent to £231.1m as IG Group continued to attract more active clients.
“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,” said Felix.
“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.”
The number of IG’s active clients rose 55 per cent to 238,600.