THG confirms plans to demerge Ingenuity alongside £75m fundraise

E-commerce firm THG has confirmed it will press ahead with the demerger of its Ingenuity division today as it revealed plans for a £75m fundraise led by boss Matthew Moulding.

In a statement to the market this evening, the London-listed firm said the demerger of Ingenuity, which includes City AM, will ease the “simplification of THG’s business model, as a cash generative global consumer beauty and nutrition group, with an improved balance sheet, capex and  cashflow profile”.

The final terms of the demerger will be provided in due course but the firm is expected to be  demerged into an independent private company at an equity value of around £100m.

“The Board believes that there is a significant opportunity to create value for shareholders by demerging Ingenuity into a separate private company which can focus on scaling brands digitally, navigating the complexities of acquiring  new audiences, driving traffic, facilitating frictionless ecommerce and distributing products to consumers,” THG said in a statement.

After the deal is complete, THG will continue to house THG Nutrition and THG Beauty, which it said in a trading statement today has grown third quarter revenues by 2.8 per cent to £254.7m.

The announcement came alongside plans to launch a £75m equity raise today to facilitate the spin-off. Moulding, founder and chief executive of THG, has indicated his intention to invest £10m in the equity raise along with long-term THG shareholders including Sir Terry Leahy, Sofina and Mark Evans, also likely to back the funding round.

Moulding and other shareholders in the firm are expected to make up around £33m of the target equity raise, THG said.