Plus500 Acquires Cunningham Commodities, Expands into US Futures Market

​Plus500​, an online CFDs broker, today announces that it has conditionally agreed to acquire all of the membership interests of Cunningham Commodities LLC. (Cunningham), a regulated Futures Commission Merchant, and Cunningham Trading Systems LLC. (CTS), a technology trading platform provider, operating in the futures and options on futures market in the US.

The Acquisition represents a major growth opportunity for Plus500​, allowing the Company to instantly expand its geographic footprint and product offering in the significantly growing, but under-penetrated, US retail trading market in futures and options on futures.  

The Acquisition consideration of approximately US$30m will be funded from Plus500's existing cash balances and paid on completion, subject to certain adjustments. Portions of the consideration are to be held in escrow for two years from completion of the Acquisition, for retention purposes.

For the year ending 31 December 2020, Cunningham generated gross revenue of approximately US$19m and profit before tax of approximately US$0.6m, with gross assets of approximately US$70m, and brings with it a scarce and valuable license to operate in the futures and options on futures market in the US.

The Acquisition is expected to be earnings accretive in its first full year and is expected to be completed during Q3 2021, subject to the receipt of certain regulatory approvals and other closing conditions. 

The futures and options on futures market in the US represents a major growth opportunity for Plus500​, particularly as a result of an increasing focus on futures exchanges in catering for retail investment in recent years. Since 2017, there has been an 84% growth in retail trading volumes in the US futures and options on futures market, with the retail market now estimated to be worth $2bn globally.

David Zruia, Chief Executive Officer of Plus500, commented: "We are delighted to announce Plus500's first acquisition and first entry into the US market. With a combination of Plus500's best-in-class technology and Cunningham's and CTS's existing infrastructure, we expect to develop and scale the business in the growing US market and deliver long term shareholder value."

Bill Cunningham, Andrew Busby and Nate Ostrye, the founders of Cunningham and CTS, commented: "We are very pleased to become part of Plus500, given its focus on technology and innovation and its strong track record of growth, as we look to grow and enhance Cunningham and CTS over time. We are looking forward to a successful future together as we take the businesses to the next level of their development."

This expansion activity of Plus500 via acquisition was possibly supported by the company's strong revenue generated in the first quarter of 2021. As Fazzaco reported last week, Plus500 reported a revenue of $203.2m for Q1 2021​, which is significantly higher than the $91.9m for Q4 2020.