With the acquisition of tastytrade, IG Group is expected to increase the scale and relevance of its existing US business, and expand and diversify growth drivers
UK-based online trading platform IG Group has agreed to acquire tastytrade, a US-based online brokerage and trading education platform, for $1bn.
Established in 2011, tastytrade is a differentiated financial content and trader education platform, which also provides advanced options and futures brokerage.
Of the total consideration of $1bn, IG Group will pay $300m to tastytrade’s shareholders in cash and issue 61 million IG shares, worth $700m.
Upon closing of the acquisition, key tastytrade management shareholders Tom Sosnoff, Kristi Ross, Scott Sheridan and Linwood Ma will be appointed as IG senior leadership team.
With the acquisition of tastytrade, IG Group is expected to increase the scale and relevance of its existing US business, and expand and diversify growth drivers.
Also, tastytrade team members are anticipated to continue in their previous roles, and collectively own around 5.7% of the enlarged share capital of IG Group.
IG Group chief executive June Felix said: “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 disrupter 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.”
Closing of the transaction is subject to the satisfaction of certain customary closing conditions, including regulatory and anti-trust consents in the US.
Tastytrade co-founder and co-CEO Kristi Ross said: “We created tastytrade with a vision to challenge self-directed investors to think and trade strategically. We built an ecosystem to empower them.
“No other firm has built a retail trader ecosystem in quite the same way: delivering authentic, fun and actionable research-based content through our uniquely developed financial media network; to our two revolutionary brokerage firms with intuitive front-end technology, built on high-frequency middleware; to a retail-focused futures exchange.”