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THG announces $1bn capital raising

In turn, a conditional agreement to acquire Bentley, a skincare and haircare manufacturer, for $255m (£181m) is set to be completed subject to approval in the US

The Hut Group (THG) has announced a capital raising of roughly $1bn (£708m) to support the continuation of the group’s M&A strategy.

The funds will consist of a $730m (£517m) subscription agreement with SB Management (SBM), totalling 86,621,797 new ordinary shares at the placing price. 

An institutional placing of up to $270m (£191m) will also take place, which will include up to $85m (£60.2m) from Sofina, a long-standing shareholder at THG.

In turn, a conditional agreement to acquire Bentley, a skincare and haircare manufacturer, for $255m (£181m) is set to be completed subject to approval in the US.

The deal is expected to increase THG’s FY22 revenues by $77m (£54.5m), and its adjusted EBITDA by approximately $15m (£10.6m).

Matthew Moulding, founder, executive chairman, and CEO at THG, said: “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.”

In addition to the ordinary shares fundraising, SBM, a wholly owned subsidiary of SoftBank Group, is to invest $1.6bn (£1.13bn) in THG Ingenuity for a 19.9% interest in the group.

A yet-to-be formed THG subsidiary operating trade and assets, THG Ingenuity intends to launch within the next 15 calendar months.

Moulding added that the trading partnership will provide the newly formed group with “an unparalleled global growth opportunity”.

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