SB Management, a subsidiary of Japanese investment giant SoftBank, has agreed to take a stake worth 2.33 billion dollars (1.6 billion pounds) in British online retailer The Hut Group (THG).
The deal will see SB Management snap up a 19.9 percent stake in Ingenuity, THG’s yet-to-be-formed tech platform division. The stake values the subsidiary at 6.3 billion dollars - around the same price THG was valued at when it floated last year.
The retailer is also planning to raise 1 billion dollars in funding, including 730 million dollars from SB Management.
THG founder, CEO and executive chairman Matthew Moulding [pictured], said the new partnership would provide 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,” he said in a release. “The capital raise will provide meaningful capital to accelerate our strategic growth ambitions across our whole business.”
THG acquires new beauty company
In a separate statement, the company announced it has entered into an agreement to acquire New Jersey-based prestige beauty developer and manufacturer Bentley Laboratories for 255 million dollars.
“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,” Moulding said.
THG has continued to prosper during the pandemic, capitalising on consumers’ shift to online shopping.
For the year ending December 31, revenue soared 41.5 percent to 1.6 billion pounds. Revenue for the group’s beauty division increased 57.1 percent to 751.6 million pounds, while revenue at THG Ingenuity increased 7.3 percent to 137.3 million pounds.
The company reported an operating loss of 481.8 million pounds, compared to a profit of 33.5 million pounds a year earlier, citing one-off, non-cash items including costs associated with its IPO and Covid, as well as a 331.6 million pound non-cash share-based payments charge.