IG Group (IGG) M&A announcement summary

Deal rationale and strategic fit

• Acquisition positions the group as a leader in US prediction markets, expanding into high-growth sectors including sports, financial, cultural, and political event trading, and broadening the addressable market.

• Expands the customer base with over 1 million mobile-first monthly active users, predominantly under 40, lowering the average customer age and increasing engagement.

• Provides full control over product, user experience, and risk management through a vertically integrated license stack.

• Accelerates the convergence of trading, investing, and entertainment, reinforcing strategic priorities and enabling cross-sell opportunities.

• Underdog's founder-led, product-first culture and strong brand equity complement existing capabilities.

Financial terms and conditions

• Total consideration up to $1.3 billion: $1.1 billion upfront (partly in shares), $200 million earnout based on 2026 net revenue and positive EBITDA.

• Management incentive plan for employees, capped at $850 million, contingent on EBITDA targets for 2028 and 2029, self-funded by Underdog’s earnings.

• Approximately 60% of upfront consideration settled in new shares, 40% in cash funded via a bridge facility; $160 million existing debt to be repaid.

• Founders and key shareholders receive shares subject to vesting and lock-up.

• Closing expected late 2026 or early 2027, subject to regulatory and antitrust clearance.

Synergies and expected cost savings

• Revenue synergies expected from cross-selling, multi-product relationships, and leveraging shared product engineering, marketing, and regulatory licenses.

• Integration of Underdog's technology stack expected to create monetization opportunities and internalize clearing functions.

• Capital efficiency gains anticipated from a shared balance sheet.

• Combined group expected to grow above standalone organic growth rate of 10% CAGR beyond 2026.