London-listed financial broker IG Group announced today that it is planning to acquire Tastytrade for $1 billion. The broker said that it will pay $700 million in IG shares and the rest $300 million in cash.
Tastytrade will remain the same
Tastytrade is a US-based online broker and trading education platform. IG Group said that the management team of IG Group will remain the same after the acquisition. The group plans on paying $300 million in cash and $700 million via 61 million shares of IG. The deal is expected to close in the first quarter of the financial year ending May 21, 2022 subject to regulatory approvals.
Tastytrade currently has more than 105,000 active trading accounts. The company, headquartered in Chicago, has over 900,000 unique registrations. IG Group wants to make a stronger presence in the US retail market with this acquisition.
A financially attractive deal
IG said that the deal was financially attractive for their group. It was facilitated by Jefferies Market Stricture & Technology, which has advised several firms to complete sector-defining transactions, including a $44 billion mega-deal between S&P Global and IHS Markit. IG Group CEO June Felix commented on the acquisition and said,
“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 that is adjacent to IG’s core retail trading skill set.”
Felix also noted that the US is the largest derivatives market in the world and has over 1.5 million retail traders. Tastytrade has grown in this market significantly and proven to be an innovative platform for users. Tastytrade management previously created the online futures trading platform Thinkorswim which was acquired by TD Ameritrade in 2009.