Softbank invests $730m in Britain's e-commerce company THG

The deal gives Softbank a stake of just under 10% in the company

FILE PHOTO: SoftBank Corp's logo is pictured at a news conference in Tokyo, Japan, February 4, 2021. REUTERS/Kim Kyung-Hoon/File Photo  GLOBAL BUSINESS WEEK AHEAD

Beauty and lifestyle e-commerce company THG has raised more than $1 billion in new equity, including $730 million from Japan's Softbank Group , the company said on Tuesday.

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

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

The equity placing was priced at 596 pence per share and was oversubscribed, with THG raising a total of $320m from other investors. THG shares soared as much as 14 per cent 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, a New Jersey-based prestige beauty developer and manufacturer, for $255m.

If Softbank exercises its option to invest in that division, it would give the Japanese technology conglomerate a 19.9 per cent interest in THG Ingenuity at a valuation of $6.3bn.

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