Yahoo Finance The Hut Group strikes jumbo $1 billion fundraiser as SoftBank comes on board
THG founder and chief executive Matthew Moulding
(Handout)E-commerce giant The Hut Group today struck a complex joint venture deal with Japanese investment giant SoftBank that values its new business-to-business tech arm at $6.3 billion - the same value that the whole company floated at last year.
THG is best known for selling beauty and fitness supplements online around the world. But it also has a division that handles online sales for third parties, called Ingenuity.
SoftBank, known for taking massive bets on technology around the world, has today bought an option to buy 20% of Ingenuity in a complex deal that sees it invest $730 million in the group.
If it were to buy the Ingenuity stake, it would pay $1.6 billion under the terms of today’s deal.
As well as injecting cash to grow Ingenuity, SoftBank will also team up with the business to spread it to other companies it owns or has big stakes in.
Analysts speculated that could include online retailing giants such as Yahoo Japan.
Today’s deal will inevitably give rise to speculation that THG will split off Ingenuity as a separate company on the stock market.
The Softbank cash injection comes as part of a complex deal today which includes a $1 billion fundraiser for THG to invest in takeovers.
That sum is made up of the $730 million from Softbank plus a share placing of up to $270 million including up to $85 million from its pre-IPO shareholder Sofina.
Separately, THG today announced a $255 million takeover of Bentley Laboratories, a US upmarket beauty products developer and manufacturer.
Softbank’s investment into Ingenuity catches the division at such an early stage that it is not even yet a separately formed subsidiary. The process of creating an individual legal entity to receive the Japanese giant’s money will begin now.
Barclays, Citigroup, Goldman Sachs and Jefferies are acting as joint global coordinators and joint bookrunners for the placing, which will be of up to 32 million shares at 596p - tonight’s closing price for the stock.
The shares were floated at 600p, since when they surged before drifting down since January as some of the steam came out of tech company valuations.
Analysts have compared Ingenuity to being like Ocado’s division which runs robot warehouses for other grocery giants.
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