IG Group acquires Underdog for $1.3B

IG Group Holdings, a UK-based online trading firm, agreed to acquire Underdog, a US daily fantasy sports and prediction markets operator, for up to $1.3 billion. The deal includes an upfront consideration based on an enterprise value of about $1.1 billion and an earnout of about $200 million for Underdog shareholders. The upfront equity value of about $963 million will be paid with roughly 24.1 million new IG shares and about $380 million in cash, and IG will repay about $160 million of Underdog debt. Eligible Underdog employees could receive up to $850 million through a management incentive plan tied to Underdog achieving EBITDA of at least $400 million in 2028 and $700 million in 2029. Underdog, founded in 2020, has become the second-largest daily fantasy sports operator by revenue in the US and, since launching prediction markets in September 2025, the third-largest US prediction markets venue by regulated notional volume flow, behind Kalshi and Robinhood. The acquisition is expected to more than double IG's US revenues and increase US monthly active customers more than tenfold. IG has entered into a bridge facility of up to $950 million with Barclays and Goldman Sachs to fund the transaction. The deal is expected to be broadly neutral to adjusted earnings per share in year one and double-digit percent accretive by year three. Completion is expected in late 2026 or early 2027, subject to regulatory approvals including under the Hart-Scott-Rodino Antitrust Improvements Act.