Manchester’s Hut Group raises €1bn for expansion

Matthew Moulding, The Hut Group founder and CEO

Manchester-based online beauty and wellness firm The Hut Group (THG) said it raised about €1 billion in capital to help fund expansion.

The new capital comprises a €600 million term loan, a five-year £150 million credit facility and a £200 million package provided to a new THG subsidiary, the company told Reuters.

THG said it raised about £66 million of primary equity from BlackRock Inc and Belgium-based investor Sofina SA to help it expand its beauty and wellness brands as well as its e-commerce platform Ingenuity. 

BlackRock, a long-term investor in The Hut Group, increases its stake in the firm via the new investment.

The capital will also be used for developments of content studios and offices at Manchester Airport, THG added.

As part of the capital-raising process, THG has secured a public debt rating of B1.

On the financing deal, Citi, Barclays and HSBC acted as mandated lead arrangers and joint global coordinators with Santander, JP Morgan and National Westminster Bank as mandated lead arrangers and bookrunners.

The Hut Group founder and CEO Matthew Moulding said: “The expanded capital raising is a landmark achievement and provides an exceptional growth and investment platform for the business.

“The significant excess demand and new debt rating, and during the time of the general election, demonstrate the strength of THG’s business model and proposition and is further testament to the global model we’ve built.

“Our business continues to evolve with the demands of consumers, as we continue to invest across the Group to develop our people, infrastructure and particularly our proprietary ecommerce solution, Ingenuity.”

William Abecassis, head of innovation capital at BlackRock, said: “We are thrilled to be growing our investment in the Hut Group, a company that is at the forefront of retail digitalisation.

“Their Ingenuity platform offers a uniquely credible end-to-end solution for global CPG brands seeking to transition to a digitally native footprint.”

Ahmed Yeganeh, managing director for large corporate banking, North region, HSBC UK, said: “We have worked with THG for many years, supporting the business’s growth, investments in global infrastructure and acquisitions.

“We were delighted to act as joint global coordinator in their first successful step into the institutional capital financing market and are looking forward to supporting their plans for the future.”

Na Wei, managing director, Barclays European leverage finance, said: “We were extremely impressed with the high level of market engagement and investor appetite for THG’s inaugural €600m capital market term loan issuance.

“This hugely successful benchmark transaction has cemented the company’s future access to the capital market as it continues to grow and deliver its ambitious growth strategy.”

Sam Norton, managing director, Citi, said: “Unsurprisingly, THG has done it again – the success and significance of this seven-year maiden TLB issuance will be remembered as an inflection point in the group’s history.

“It is yet another ringing endorsement of both the near term momentum and long term outlook of this uniquely-positioned, global business and its best in class management team.

“Their leading equity story is now supported by a long-term capital structure, fully aligned financing partners, and a fully-funded property strategy.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.