Freetrade, the popular, low-cost investment app, has agreed to be acquired by IG Group for £160 million. The IG Group operates the very large and well established trading and investment platform IG¹.
The move opens up a new (potentially younger) customer base for IG and the potential for technology integrations. It is expected that Freetrade¹ will remain as it is, remaining as a standalone commercial operation, and retaining the app technology and brand, with no change for customers in the short term.
The deal is all in cash, with all shares acquired, and funded from IG’s cash reserves.
Freetrade¹ was a popular crowdfunding investment, with 1,000s of shareholders. Shareholders may initially be excited, but due to the low valuation, and according to our calculations, the majority will have lost money, with only those investing in 2019 or before making a small profit on their shares.
The estimated share price on completion of the deal is:
Note: crowdfund investors do not have a choice as to whether to sell or not.
The deal still requires approval from the financial regulator, the Financial Conduct Authority (FCA), but it is likely to be approved, and the deal to complete in mid-2025.
