The Hut Group eyes first takeover since £5.2bn float

The Hut Group, the online retailer and technology company which floated this month, has struck its first takeover deal since going public with the purchase of a leading international skincare brand.

Sky News has learnt that THG Holdings, which has seen its shares soar since going public a fortnight ago, will announce the purchase of Perricone MD as soon as Wednesday.

If completed, a deal to acquire Perricone MD, which specialises in anti-ageing products, would add the brand to a beauty and wellbeing portfolio which includes Christophe Robin and Myprotein.

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Perricone MD has been owned by Lion Capital, a private equity firm, since 2014.

Founded in 1997, it makes products such as face-lifting serum and neck-firming cream in one of the faster-growing segments of the cosmetics and beauty market.

The price that THG had agreed to pay for the skincare brand, which it has sold on its platform for many years, was unclear on Tuesday night.

A person close to the transaction said the deal would vindicate the strategy set out by THG’s board at the time of its float this month, as it seeks to position itself as the natural digital home for beauty and wellbeing brands.

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The Manchester-based company’s infrastructure platform, THG Ingenuity, works with global consumer brand-owners such as Nestle, Procter & Gamble and Walgreens Boots Alliance to power their digital operations.

THG Holdings floated at 500p-per-share, and has seen an immediate spike as investors have bought into one of Britain’s biggest homegrown tech ‘unicorns’.

On Tuesday, its shares closed at 603.9p, giving it a market capitalization of £5.83bn.

Founded in 2004 by Matthew Moulding, who continues to run the company, THG operates 200+ localised websites, and sells goods in 169 countries, according to a spokesman.

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Last year, it grew sales by 24% to £1.14bn, with two-thirds of sales generated internationally.

In the run-up to the flotation, Sky News revealed that Mr Moulding could land one of the biggest payouts in British corporate history from an incentive scheme that will pay out if THG reaches a market value of £7.25bn by the end of 2022.

If it does, he could receive shares worth more than £700m.

Mr Moulding has led the growth of THG into a giant of Britain’s digital economy employing 7000 people, and already owns a significant minority stake in the company.

THG listed with an unusual structure which included a ‘founder share’, allowing him to veto a hostile takeover bid in the coming years.

Despite the governance arrangements, THG’s shares were in enormous demand ahead of the float.

THG and Lion Capital declined to comment on the Perricone MD deal.