The London-based online trading powerhouse, IG Group today announced plans to take over a US-based retail online broker and a trading education platform, TastyTrade in a deal worth a reported $1 billion. IG Group stated that they believe TastyTrade “is highly complementary to IG’s existing client offering, adding a leading provider of exchange-traded derivatives and increasing the contribution from agency-only activities.”
According to the announcement, Tastytrade has over 105,000 active trading accounts and approximately 900,000 sign-ups with headquarters in Chicago. IG Group believes the purchase “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 acquisition is said to take place with $300 million in cash and the issuance of 61.0 million IG shares, valued at $700 million from IG, whereas the management team of Tastytrade would stay on following the close of the transaction. The deal is expected to have a minimal “single-digit” accretive to IG’s adjusted earnings per share in the first year following the purchase.