Beauty and lifestyle e-commerce company THG Plc has raised more than $1 billion in new equity, including $730 million from Japan’s SoftBankGroup .
The deal gives SoftBank a stake of just under 10 percent in the Manchester-based company formerly known as The Hut Group, and an option to invest a further $1.6 billion into THG’s technology arm THG Ingenuity.
THG owns beauty retailer Lookfantastic, makeup brand Illamasqua and beauty box service Glossybox, as well as supplements firm Myprotein. THG said it would use the money to “execute an advanced pipeline of strategic M&A.”
The equity placing was priced at 596 pence per share and was oversubscribed, with THG raising a total of $320 million from other investors. THG shares were up 12.7 percent at 08:28 GMT on Tuesday, having risen as much as 19 percent.
The cash injection comes less than a year after THG’s London listing when it raised £1.88 billion ($2.65 billion)selling shares at 500 pence each.
THG also announced it agreed to buy Bentley Laboratories LLC, a New Jersey-based prestige beauty developer and manufacturer, for $255 million. This is the latest in a number of deals THG has made since listing, including US skincare brands Perricone and Dermstore.com.
THG said it plans to spin THG Ingenuity, which provides e-commerce services to other companies, into a separate company within the next 15 months. After that SoftBank would then be able to exercise its option to invest in that business.
If SoftBank exercises its option to invest $1.6 billion in that division, it would give the Japanese technology conglomerate a 19.9 percent interest in THG Ingenuity at a valuation of $6.3 billion.
The equity fundraising was led by Barclays, Citigroup, Goldman Sachs and Jefferies.
By Nandakumar D, Rachel Armstrong and Anna Irrera; Editors: Shailesh Kuber, Kim Coghill, Louise Heavens and Jane Merriman