Softbank leads $1 billion investment in Britain’s THG

The logo of SoftBank Group Corp is displayed at SoftBank World 2017 conference in Tokyo, Japan

Beauty and lifestyle e-commerce company THG HG Plc (THG.L) has raised more than $1 billion in new equity, including $730 million from Japan’s Softbank Group (9984.T), the company said on Tuesday.

The deal gives Softbank a stake of just under 10% in the Manchester-based company formerly known as The Hut Group, and an option to invest a further $1.6 billion into THG’s Ingenuity business.

THG owns beauty retailer Lookfantastic, makeup brand Illamasqua and beauty box service Glossybox, as well as supplements firm Myprotein.

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 soared as much as 14% at the open on Tuesday.

The cash injection comes less than a year after THG’s London listing and will be used to fund further acquisitions. The company also announced it agreed to buy Bentley Laboratories LLC, a New Jersey-based prestige beauty developer and manufacturer, for $255 million.

THG Ingenuity is THG’s technology arm that provides e-commerce services to other companies. If Softbank exercises its option to invest in that division, it would give the Japanese technology conglomerate a 19.9% interest in THG Ingenuity at a valuation of $6.3 billion.

The equity fundraising was led by Barclays, Citigroup, Goldman Sachs and Jefferies.

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