THG successfully raises £95.4m, exceeding its initial target, to demerge its Ingenuity division.
- The funding was achieved through a share placing and subscription offer, overshooting the £75m goal.
- CEO Matthew Moulding played a key role by investing £10m himself to support the initiative.
- Frasers Group will invest £10m in THG, solidifying a strategic partnership announced earlier.
- THG’s strategic plan includes separating Ingenuity into a private company, maintaining it as a standalone entity.
In a significant financial maneuver, THG has successfully raised £95.4 million, surpassing its original target of £75 million, as part of its strategy to spin off its Ingenuity ecommerce division. The funds were garnered through an oversubscribed and upsized equity raise, involving a share placing and a subscription offering. This move underscores the confidence of investors in THG’s strategic direction and the potential of Ingenuity as a standalone entity.
Existing shareholders, led by CEO Matthew Moulding, made substantial contributions to this funding round, collectively inputting around £50 million. Moulding himself invested £10 million, demonstrating his firm commitment to the future of Ingenuity. This inflow of capital is expected to provide Ingenuity with adequate medium-term funding as it approaches positive cash generation independently.
The process of demerging Ingenuity from THG has been underway since at least September, with THG planning to maintain its consumer brands group post-demerger. THG Beauty and THG Nutrition are set to remain part of the core company after the separation of Ingenuity. The demerger is a strategic realignment aimed at enhancing the operational focus of both THG and its Ingenuity business, allowing each to thrive in its niche.
Additionally, Frasers Group has confirmed its intention to invest £10 million in THG. This capital injection is part of a strategic partnership between the two companies, first revealed in June. The relationship is poised to bring about mutual benefits as both entities leverage each other’s strengths. This strategic investment further validates THG’s business model and growth prospects.
Matthew Moulding’s comment highlighted the milestone event, asserting the significant progress in their strategy to demerge THG Ingenuity into a private company. He expressed optimism about THG’s future, particularly its planned transfer to new equity shares commercial companies (ESCC), marking a new chapter for the organization.
THG’s successful fundraise and strategic moves signal a transformative phase, poised for growth and enhanced focus.
