The Hut Group receives £1.6bn investment from Softbank

The Hut Group (THG) is set to receive a £1.6 billion investment from Japanese conglomerate SoftBank.

The Manchester-based company operates over 100 websites, including Lookfantastic and Myprotein, and provides e-commerce technology to other firms such as Unilever.

SoftBank operate the Saudi-backed Vision Fund, the world’s largest technology investment fund, which owns large stakes in Slack, Uber, and e-commerce platform Flipkart.

THG chief executive Matt Moulding said the capital will allow the company to “invest aggressively”.

Founded in 2004, the group posted £1.6 billion of revenues for the 2020 financial year, a 42 per cent year-on-year increase, boosted by the pandemic shift to online retail.

THG had the largest initial public offering (IPO) on the London Stock Exchange (LSE) since 2013 in September 2020.

The deal gives the yet to be launched business-to-business technology arm Ingenuity a $6.3 billion valuation, by giving SoftBank the right but not the obligation to buy a 20 per cent stake in the company for $1.6 billion.

The e-commerce company also announced the planned spinoff of its Ingenuity arm, which will rent out its online retail and logistics infrastructure to third parties, as a separate subsidiary.

Barclays, Citigroup, Goldman Sachs, and Jefferies will act as joint global coordinators and joint bookrunners for the deal.

THG also announced a $255 million takeover of Bentley Laboratories, a US-based company which develops beauty products.

“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,” said Moulding. “The capital raise will provide meaningful capital to accelerate our strategic growth ambitions across our whole business.”

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