IG Group to acquire 70% stake in Independent Reserve

IG Group announced the acquisition of an initial 70% stake in crypto platform Independent Reserve for £53 million, valuing the target at 5x its projected £17.7 million revenue for the 12 months ending June 2025. This strategic move, expected to close in early 2026, aims to accelerate IG's expansion into Asia-Pacific cryptocurrency markets and is anticipated to be earnings per share accretive by fiscal year 2027, with return on invested capital exceeding the Group’s WACC by FY29-31, following Independent Reserve's reported 88% year-over-year revenue growth and £5 million EBITDA.

Analysis

IG Group is executing a strategic, bolt-on acquisition by securing a 70% stake in crypto platform Independent Reserve for £53 million in cash. The deal values the target at 5 times its projected revenue for the twelve months ending June 2025, a period in which Independent Reserve is expected to generate £17.7 million in revenue and £5 million in EBITDA. This valuation is supported by the target's strong growth metrics, including an 88% year-over-year revenue increase and a 60% rise in average monthly active customers. For IG Group, the acquisition is financially minor in the short term, with the target's revenue and EBITDA contributing approximately 2% and 1% respectively to the Group's total. The primary rationale is strategic: to accelerate expansion into the Asia-Pacific cryptocurrency market. Management projects a long-term payoff, with the deal expected to become earnings per share accretive in fiscal year 2027 and achieve a return on invested capital exceeding the Group's cost of capital between fiscal years 2029 and 2031.

Key Decisions for Investors

• Investors should view this acquisition as a long-term strategic play on the crypto market, as the projected financial benefits, such as EPS accretion and positive ROIC, are not expected to materialize until fiscal year 2027 and beyond.
• Given the target's financials represent only 1-2% of IG Group's figures, this deal is not expected to have a material near-term impact on the Group's earnings or stock valuation.
• It is prudent to monitor the execution of IG's APAC strategy and the performance of the acquired crypto business post-close, as the investment's success is contingent on sustained user growth and favorable cryptocurrency market conditions.
• Pay close attention to IG Group's upcoming first-quarter 2026 results on September 25 for potential management commentary on the integration plan and updated strategic outlook.