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Plus500 acquires Cunningham Commodities, enters US futures market



Plus500, a technology platform for CFD trading, has just announced it has agreed to acquire regulated Futures Commission Merchant (FCM), Cunningham Commodities LLC, and technology trading platform provider, operating in the futures and options on futures market in the US, Cunningham Trading Systems LLC (CTS).

David Zruia, Chief Executive Officer of Plus500, commented:

David Zruia, Plus500
David Zruia
Source: LinkedIn

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.

The acquisition allows Plus500 to expand its geographic footprint and product offering in the US retail trading market in futures and options on futures. With the acquisition of Cunningham and CTS, Plus500 has a substantial opportunity to enable market access to the millions of US retail investors looking for new trading opportunities through its technology. Plus500 will ensure immediate access to, and the requisite licenses to operate in the growing US market, where the company does not currently operate or have a presence. The acquisition will expand Plus500’s product offering in the US, diversifying its sources of revenue. The move aligns with the Group’s strategy for future growth through organic investment in its technology as well as targeted bolt-on acquisitions.

Acquisition, merger

David Zruia continued:

The acquisition represents an important strategic step for Plus500 as we continue to transition into a global, multi-asset fintech group. Our long-term ambition is to enable simplified, universal access to financial markets, and I’m excited that we have taken a further step toward achieving this today.

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.

Plus500 plans to put in its financial and technological effort and technological marketing expertise and resources to develop the acquired business over time and deliver long term shareholder value.

The acquisition consideration will be for the amount of approximately $30 million, paid on completion. Plus500 will use funding from existing cash balances. For retention purposes, parts of this amount will be held in escrow for two years from the completion of the acquisition.

Based in Illinois, Cunningham generated revenue for 2020 reached $19 million, profit before tax – $0.6 million and gross assets amounted – $70 million. The company brings a valuable license to operate in the futures and options on futures market in the US. Cunningham is registered as an FCM with the CFTC. It is a member of National Futures Association and a clearing member of the Chicago Board of Trade, Division of CME Group, Inc.

The acquisition is expected to close in the third quarter of 2021 and it is expected to be earnings accretive in its first full year.

Plus500 recently released a trading update for the first quarter of 2021. For the three-month period ended on 31 March, the brokerage reported $203.2 million in revenue with a massive 121% jump compared to the last quarter of 2020. The company proposed Professor Jacob A. Frenkel  last month to be appointed as Chairman of its Board of Directors.

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Plus500 acquires Cunningham Commodities, enters US futures market

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