IG Group Acquires Underdog for Up to $1.3bn While Reporting Growth in H1 2026

BLUF: IG Group Holdings PLC has agreed to acquire Underdog Sports Holdings Inc. for a total price of approximately USD1.3 billion, while reporting total revenues for the first half of 2026 of £642.8 million, an 18% increase compared to the same period in 2025. The transaction combines an initial enterprise value of ~USD1.1 billion and an earn-out of ~USD200 million; the offer was announced on July 30, 2026.

Transaction Details: IG Group Acquires Underdog

On July 30, 2026, IG Group announced its proposed acquisition of Underdog, a US operator in prediction markets and daily fantasy sports. The total consideration includes an upfront payment linked to an enterprise value of approximately USD1.1 billion and an earn-out agreement for Underdog shareholders amounting to USD200 million, summing to around USD1.3 billion.

The British company described Underdog as "the third-largest prediction market operator in the US by regulated notional volume" and stated that it expects the acquisition to more than double its revenues in the US and increase IG's active monthly users in that market by more than tenfold. The announcement has clear strategic implications: IG aims to position itself as a leading player in the US prediction markets and accelerate its local growth.

Financial Results for the First Half of 2026 and Context

IG Group changed its financial year-end to December 31 in November; for the six months ended June 30, 2026, the London-based company reported:

• Total revenues: £642.8 million, compared to £545.2 million in the same period of 2025 (+18%).

• On a like-for-like and continuous basis: £623.7 million, compared to £534.8 million (+17%).

• Net trading revenue: £588.8 million, compared to £485.4 million (+21%).

• Continuous organic revenues: £574.2 million (+20%).

• EBITDA: £282.0 million, compared to £270.4 million (+4%).

IG explained that the EBITDA growth occurred "despite lower interest revenues —as rates fell and more was passed on to customers— increased investment in our propositions and marketing, and costs associated with the strategic review." The strategic review, initiated in March, "is now substantially complete," the company stated.

Guidance and Expectations Without Underdog

For 2026, IG maintains its annual results forecast in line with market expectations and has kept its average guidance unchanged when excluding the effect of Underdog. This guidance includes a compound annual growth rate (CAGR) for total revenues of at least 10% off a 2025 base.

Previously Published Benchmarks:

• Target organic revenue growth of between 10% and 15% from a base of £1.10bn in 2025 (excluding Freetrade and Independent Reserve).

• Expected net interest income between £110 million and £120 million.

• Expected EBITDA margins in the mid-range of 40%.

IG proposed an interim dividend of 14.46 pence for the first half.

Executive Commentary and Strategic Reasons

"This was a strong first half," stated Breon Corcoran, Chief Executive Officer of IG Group. "Faster product velocity, increased marketing at attractive returns, and a rapidly growing customer base drove double-digit revenue and adjusted EPS growth. Our proposed acquisition of Underdog announced on July 30, 2026 marks a decisive step in our strategy, establishing IG as a leader in the fast-growing US prediction markets."

Corcoran linked the operational performance from the first half —faster product offerings, increased marketing with attractive returns, and expansion of the customer base— to the group's ability to justify the acquisition. IG expects Underdog to drive both revenue and user base growth in the US.

Impact on the US Business and Integration Priorities

IG has outlined specific targets related to the acquisition: more than doubling revenue in the US and achieving over tenfold growth in active monthly users in that market. The company now must manage the regulatory, technological, and commercial integration of Underdog to meet these targets.

Immediate priorities are:

1. Validate Underdog's user growth and prediction volume assumptions.

2. Execute technological and product integration plans to accelerate offerings in the US.

3. Maintain target margins while investing in customer acquisition.

What This Means for the US Prediction Markets Sector

The transaction positions IG as an established player in the US prediction markets and adds distribution capacity to a business already significant by regulated volume. The move also raises questions about competition and consolidation in a segment experiencing accelerated growth.

Operationally, IG will need to demonstrate that the assumptions behind the acquisition multiple and earn-out translate into revenue growth and profitability in the medium term.

Implications for Investors and Competitors

For investors, the half-year results show top-line growth and improved trading metrics, while the acquisition of Underdog adds equal parts risk and opportunity: integration risk and the potential for leveraged returns; significant growth opportunity in a high-potential market. The company is confident in maintaining mid-40% EBITDA margins following the integration of new investments.

In the ecosystem, competitors and technology providers will be watching for signals on consolidation and potential counter-moves in product and marketing, especially in prediction markets and customer acquisition channels in the US.