- General
- May 13, 2021
- 4 minutes read
SoftBank Takes Big Position In UK E-Commerce Firm THG
Japanese tech conglomerate SoftBank makes big billion-dollar investments as regularly as you and I take trips to the grocery store.…
Japanese tech conglomerate SoftBank makes big billion-dollar investments as regularly as you and I take trips to the grocery store. With that analogy, SoftBank’s latest trip to the grocery store is a major investment in one of the UK’s hottest e-commerce companies.
- SoftBank has made a major investment in THG, or The Hut Group, a British e-commerce company owning many global e-commerce brands. THG became a public company just last year with an IPO that was the largest on the London Stock Exchange in a seven-year span.
Details:
- SB Management, a division of SoftBank, has agreed to invest $730mn in THG in exchange for a stake of just under 10% in the company. SoftBank’s funds make up the majority of a $1bn share placement by THG to be used to further the company’s mergers & acquisition-based expansion strategy.
- Along with investing in THG, SoftBank has also struck a surprise deal to invest $1.6bn in a division of THG named THG Ingenuity, a division described as a “social media influencer platform” to promote THG’s products as well as that of other brands.
- The $1.6bn investment gives SoftBank a 20% equity interest in THG Ingenuity, valuing it at $6.3bn on a pre-money equity basis. The remaining equity interest is held by parent firm THG.
- THG has an option to spin off THG Ingenuity into a separate majority-owned subsidiary within 15 months by the way of an IPO, sale, or ‘other structural options’. The company also says it’ll conduct a review for the separation of other businesses such as THG Beauty and THG Nutrition “in order to maximize value for all stakeholders.”
- Raising $1bn in new funds for its business, THG’s current shareholders will be diluted significantly with the new fundraising. With the funds, it’ll continue its long-held tradition of expanding by buying up other e-commerce companies.
- In fact, THG just newly bought an e-commerce brand that was announced along with its SoftBank deal. It’s agreed to pay $255mn for Bentley Laboratories, a US-based maker of skincare and haircare products.
