LONDON (dpa-AFX) - Fintech firm IG Group Holdings plc (IGG.L) Thursday announced the acquisition of Freetrade, a commission-free, self-directed investment platform, for 160 million pounds.
Completion is subject to customary conditions including regulatory approvals and currently expected in mid-2025.
The acquisition is expected to achieve a return on invested capital in excess of IG's weighted average cost of capital in years three to five.
IG expects to fund the deal price in cash from existing capital resources.
Freetrade provides a wide range of products, including over 6,200 global stocks and ETFs, fractional shares, UK Treasury bills, ISAs, SIPPs, securities lending, and proxy voting. The subscription-based investment platform is an emerging player in the UK market with 720k customers and AUA of £2.5 billion as of the end of 2024. In 2024, revenue increased 32% year-on-year to 27.5 million pounds.
IG Group expects the deal to strengthen its UK trading and investments offering and provide access to new customer segments and capabilities.
IG plans to operate Freetrade as a commercially standalone business with its own brand, existing management team and operational platform. Viktor Nebehaj, CEO and co-founder, and the leadership team, will remain with Freetrade and continue to scale the business.
Breon Corcoran, CEO of IG, said, 'This is a rare opportunity to strengthen IG's UK trading and investments offering and broaden our target addressable market. Freetrade is one of the most successful emerging players in the UK direct-to-customer investment market, with a strong brand, highly scalable technology and delivering rapid growth.'
IG further said it expects to extend the existing share buyback programme of 150 million pounds announced on July 25, 2024 in the second half of the current financial year, subject to regulatory approval.
IG will report first-half results on January 23.
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