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IG Group to buy Underdog in up to $1.3 billion deal
The agreement includes an upfront equity value based on an enterprise value of about $1.1 billion, plus an earnout of about $200 million.
Britain's IG Group agreed to acquire U.S. daily fantasy sports and prediction markets operator Underdog for up to $1.3 billion, deepening its push into the fast-growing U.S. retail trading market, according to Reuters.
The deal includes an upfront consideration tied to an enterprise value of about $1.1 billion and an earnout of about $200 million for Underdog shareholders. IG expects to pay roughly 24.1 million new IG shares and about $380 million in cash for the upfront portion, and will repay about $160 million of Underdog debt on completion.
IG said the acquisition, along with a proposed redomicile, follows a strategic review it started in March. The company also paused its share buyback program, saying it expects to resume it in 2027 subject to completion of its Jersey redomicile, share price performance, and other capital needs.
IG CEO Breon Corcoran said the acquisition positions IG as a leader in U.S. prediction markets and accelerates growth in the world's largest retail trading market. IG expects the deal to be broadly neutral to adjusted earnings per share in year one, and double-digit percentage accretive by year three, and reported a first-half rise in revenue and profit, Reuters added.