SB Management, a wholly-owned subsidiary of Japanese investment giant SoftBank Group Corp, has announced the acquisition of a stake worth $2.33 billion (approx £1.6 billion) in The Hut Group (THG), an online retailing platform based out of Manchester.
With this deal, SB Management will acquire a 19.9% stake in THG Ingenuity, a yet-to-be-formed tech platform division. Notably, the stake values the subsidiary at $6.3 billion (approx £4.5 billion).
The UK company is also planning to raise a capital of $1 billion (approx £706 million), which includes $730 million (approx £515 million) from SBM and an institutional placing of up to $270 million (approx £190 million).
Matthew Moulding, Founder, Executive Chairman, and CEO of THG commented: “We are delighted to announce this financial and trading partnership opportunity with SoftBank, one of the world’s leading technology investors, recognising both the capability and inherent value of our proprietary technology platform, Ingenuity. The trading partnership opportunity is particularly exciting, providing Ingenuity with an unparalleled global growth opportunity. Furthermore, the combination of the acceleration of growth within Ingenuity and its separation into a distinct entity will enable THG to unlock significant incremental shareholder value over time.
“The capital raise will provide meaningful capital to accelerate our strategic growth ambitions across our whole business. The acquisition of Bentley materially increases our capability in beauty manufacturing and product development, and strengthens our position as the leading digital beauty business globally.”
40% more sales
The Hut Group had a very good 2020 even during the lockdown. The company’s sales rose more than 40% to £1.6 billion. The revenue for the groups’ beauty division increased to £751.6 million, while the THG Ingenuity increased to £137.3 million.
However, the company reported an operating loss of £481.8 million after it booked a non-cash charge of more than £331 million. The company shares climbed higher to 14% from 500 pence to 596 pence per share after the investment news.
Acquired Bentley Laboratories
On the other hand, the company has announced the acquisition of New Jersey-based Bentley Laboratories, an innovative developer and manufacturer of prestige skincare and haircare products, for $255 million (approx £180 million).
Founded by Matthew Moulding and John Gallemore in 2004, The Hut Group is an online retailing platform focused on fast-moving consumer goods, specifically focused on health and beauty.
Currently, THG operates more than 160 websites that sell premium products across 140 markets. The company has so far raised £387.5M funding to date. The Hut Group currently has a market capitalisation of £5.8 billion.
The Manchester company owns several brands including Lookfantastic, Myprotein, Illamasqua, and Glossybox. Last month, THG acquired nutrition bar Brighter Foods in a £43 million deal.