The forex broker IG Group Holdings plc revealed a $1 billion partnership with tasytrade Inc. The latter is an online brokerage and investor education platform that has seen spectacular growth of late.
IG Group expect this latest acquisition to considerably increase its scale and relevance of its existing US business. IG said that it will now be in an excellent position to tap into the fast-growing retail options trading market through this acquisition of tastytrade.
tastytrade’s platform is currently used by no less than 105,000 active and self-directed investors. Now, through their partnership with IG, these investors will be able to tap into the former’s global reach and be provided with a considerable platform for international expansion.
Forex broker IG expects significant US business through acquisition
Commenting on the acquisition, IG CEO June Felix said that this marks an important milestone in the continued delivery of IG’s growth strategy. She added that it will considerably diversify their product offering and significantly strengthen IG’s global footprint.
“tastytrade offers something that is completely new: it has truly disrupted the market by combining content that is unique and entertaining with deeply quantitative and technical analysis. This transaction will significantly enhance client choice and opportunity as we focus on providing innovative educational content. It will also provide a broad suite of products and tools to empower their financial decision making and give them the best possible trading experience”, Felix commented.
According to the official announcement, up to $300 million of the transaction is in cash. 61 million new ordinary shares in IG Group will also be issued to tastytrade shareholders.
Retail investors expected to grow considerably for IG through tastytrade acquisition
In his comments on the deal, tastytrade Founder and co-CEO Tom Sosnoff said that this deal was a milestone moment for the company. He focused on the tireless work put in by tastytrade over the past decade to build a trading ecosystem which challenges retail investors to think and trade on a strategic basis.
“Our partnership with IG gives us the opportunity to contribute this expertise as part of a global offering that reflects the scope of our ambitions”, he added.
Kristi Ross, co-Founder and co-CEO of forex broker tastytrade said that there were considerable synergies between both companies.
“Together, our mission is to deliver a sophisticated, first-in-class trading experience that puts our clients at the heart of all we do. This distinctive, differentiated offering will allow IG and tastytrade to capitalise on the long-term, structural democratisation of global financial markets”, Ross added.
There are no less than a staggering 1.5 million retail traders currently in the US options and futures market. This new partnership between IG and tastytrade is excellently poised to take advantage of what is being seen as structural growth of self-directed investing in the US.
Management teams for IG and tastytrade remain unaffected. Major tastytrade management shareholders, including Tom Sosnoff (Co-CEO, tastytrade), Kristi Ross (Co-CEO and President, tastytrade), Scott Sheridan (CEO, tastyworks) and Linwood Ma (CTO, tastytrade), have now joined the IG senior leadership team.
IG Group reported a jump in the company’s revenue for the third quarter of the financial year ending May 21. Overall trading activity was up significantly in Q3 of FY2021 with revenue of £230.3 million, an increase of 65% compared to £139.8 million in Q3 of FY2020.
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