IG Group has agreed to acquire US-based Underdog in a transaction worth up to $1.3 billion, marking one of the biggest deals yet in the rapidly expanding prediction markets sector and significantly strengthening the company’s North American presence.
The agreement values Underdog at an initial enterprise value of approximately $1.1 billion, with an additional $200 million earnout available if performance targets are met. Once completed, the acquisition is expected to establish IG Group as a major participant in the US prediction markets industry, alongside Underdog’s existing daily fantasy sports business.
IG Group CEO Breon Corcoran described the acquisition as a transformational step that accelerates the firm’s ambitions in the world’s largest retail trading market. According to the company, prediction markets represent one of the fastest-growing opportunities where financial trading and entertainment increasingly overlap.
To finance the transaction, IG will issue approximately 24.1 million new shares, pay around $380 million in cash, and assume roughly $160 million of Underdog’s outstanding debt. The company has also suspended its ongoing share buyback programme, with plans to resume repurchases in 2027, subject to the completion of its proposed corporate restructuring and other capital requirements.
The acquisition forms part of the strategic review IG launched earlier this year. Alongside the purchase, the company has proposed establishing a new Jersey-incorporated holding company to provide greater financial flexibility while maintaining its London Stock Exchange listing and UK tax residency. The wider review also includes organisational changes designed to streamline operations and support future international growth.
IG expects the Underdog deal to have a broadly neutral impact on adjusted earnings per share during its first year of ownership before becoming strongly earnings accretive by the third year. The company believes the combination will create long-term value by expanding its customer base and diversifying revenue across trading, investing and prediction-based products.
The announcement came alongside strong interim financial results. IG reported first-half revenue of £642.8 million, an increase of 18% year-on-year, while core profit rose 4% to £282 million. The company said trading during the period remained robust and reiterated its expectation of delivering full-year results in line with market forecasts.
Prediction markets have attracted growing attention across the United States as platforms allow users to trade contracts linked to the outcomes of political events, sports, economic data and other real-world developments. While interest in the sector has accelerated, it continues to face close regulatory scrutiny, making IG’s acquisition of an established operator a significant strategic move into a market expected to remain highly competitive in the coming years.