THG is demerging its digital logistics branch, Ingenuity, into a standalone entity.
The British retail group has amassed £95.4m via an equity raise, share placing and a subscription offer to spin off the technology arm.
The Lookfantastic (pictured) and Cult Beauty owner shared on 10 October that it was aiming to raise £75m, but announced today that it had overshot that target by 27%.
Matthew Moulding, CEO of THG, invested £10m in the equity raise, with existing long term and institutional shareholders contributing around £50m.
Mike Ashley’s Frasers Group, the owner of House of Fraser and Flannels, also made a strategic investment of £10m in THG.
This builds on an existing relationship between the two companies, with THG and Frasers Group having inked a strategic partnership in June 2024 that included a multi-year Ingenuity agreement.
The funds will provide the e-commerce solutions business with medium term funding as it goes solo.
While proceeds above the £75m needed to demerge Ingenuity will be used for general corporate purposes, according to THG.
Following the Ingenuity split, the Manchester-headquartered firm will comprise THG Beauty and THG Nutrition.
It also owns newspaper City A.M.
THG’s plan to demerge its technology arm and switch the listing of its Beauty and Nutrition businesses to the equity shares (commercial companies) (ESCC) category means the group may now be considered for inclusion in the FTSE UK Index Series.
At the same time as the demerger announcement, the company revealed it had submitted an initial notification and eligibility letter for transfer to the ESCC category on 1 October.
The Ingenuity demerger was announced on the same day as THG’s Q3 trading results for the period ended 30 September 2024.
Revenue for the quarter was down 2.0% on the prior year period to £433.1m.
However, both the Beauty and Ingenuity businesses enjoyed revenue growth during Q3, with THG’s Beauty business boosted by a strong advent calendar order run rate.
