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UK-listed trading platform IG Group has agreed to acquire U.S. daily fantasy sports and prediction markets operator Underdog in a deal worth up to $1.3 billion, marking its biggest move yet into the rapidly expanding American prediction markets sector.
The transaction includes an upfront enterprise value of about $1.1 billion, with a further earnout of around $200 million payable to Underdog shareholders if certain performance targets are met.
The upfront equity value is expected to be approximately $963 million and will be funded through the issuance of around 24.1 million new IG shares and about $380 million in cash. The company will also repay roughly $160 million of Underdog’s debt when the deal completes.
The acquisition significantly expands IG’s presence in the United States, where prediction markets have gained traction as platforms allowing users to trade contracts linked to the outcomes of real-world events. IG Group said the deal positions it to capitalise on growth in the U.S. retail trading market.
Breon Corcoran, IG Group Chief Executive Officer, said: “The acquisition of Underdog establishes IG as a leader in U.S. prediction markets, one of the most significant opportunities across trading and entertainment, and accelerates our growth in the world’s largest and fastest-growing retail trading market.”
IG said the purchase, together with its proposed redomicile to Jersey, brings to a close the strategic review it launched in March.
The company has also paused its share buyback programme and said it expects to resume repurchases in 2027, subject to the completion of its Jersey redomicile, its share price performance and other capital requirements.
Financially, IG expects the acquisition to be broadly neutral to adjusted earnings per share in its first year before becoming double-digit percentage accretive by the third year.
Alongside the announcement, the company reported an 18% increase in first-half revenue to £642.8 million ($865.34 million), while core profit rose 4% to £282 million. It said it remains on track to deliver full-year results in line with market expectations.