Cunningham Commodities, LLC, the registered futures commission merchant, and Cunningham Trading Systems, LLC have agreed to a combine with Plus500, according to a press release from Plus500, a British platform for trading contracts for difference (CFDs).
In a deal expected to close in the third quarter of this year, Plus 500 will acquire all of the membership interests of both companies. The approximately $30 million deal is intended to provide Plus500 immediate access to the growing U.S. retail futures trading business.
Cunningham and CTS founders Bill Cunningham, Andrew Busby and Nate Ostrye will stay on to lead the businesses following completion of the acquisition. Cunningham Commodities was formed in 1982 and has been a familiar presence at the Chicago Board of Trade, where it continues to be a member.
Cunningham Commodities, which clears CBOT contracts at the CME Clearing Division, had gross revenue of approximately $19 million and $600,000 profit before tax last year.
Plus500 is a popular trading platform for CFD trading across the U.K and Europe. CFDs are uncleared off-exchange futures contracts that are traded both by institutions and retail traders. They are generally not legal for sale in the U.S.
With more than 2,500 underlying instruments, Plus500 is one of the largest CFD platforms in the world. It says its focus will be on building retail interest in regulated futures trading in the U.S.
The emphasis on retail trading in the Cunningham/Plus 500 deal echoes other recent acquisitions of FCMs: Ninja Trader’s purchase of TransAct futures and StoneX acquisition of Gain Capital.
David Zruia, chief executive officer of Plus500, commented, “We are delighted to announce Plus500’s first acquisition and first entry into the U.S. 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.”