THG plans the bold solo effort of Ingenuity

The former stock market star THG is going public with a surprising decision: The e-commerce giant will transform its subsidiary Ingenuity into an independent private company through a spin-off. To finance this step, THG aims to raise equity of about 75 million pounds—through a placement and subscription, as well as additional proceeds from a retail offer. The funds raised, along with a standalone debt issuance, are intended to provide Ingenuity with a solid foundation for medium-term financing to achieve positive cash generation independently. THG shareholders face a choice: they can decide whether they want to receive shares in Ingenuity corresponding to their current THG stake. The valuation of Ingenuity, originally set at a minimum of 75 million pounds, can go up to 100 million pounds, depending on THG’s market capitalization at the time of the spin-off. Should THG’s market capitalization fall below the value set after the placement, Ingenuity’s valuation will be proportionally reduced. Founder Matt Moulding and his associates have already committed to contributing 33 million pounds of the required amount. Retail shareholders will also have the opportunity to purchase shares through PrimaryBid, but limited to a maximum of 8 million euros. Even after the separation, Ingenuity will remain strongly connected to THG, not least through shared executives and offices. A governance framework and an independent audit committee are set to draw clear lines of separation. Contracts between Ingenuity and the THG segments Beauty and Nutrition have been subject to strict guidelines since 2022 and are intended to remain on a neutral basis. Although the timeline for the spin-off has not yet been established, the plan is to publish the demerger document by early November at the latest and to complete the transaction by the end of 2024. Interestingly, the valuation of Ingenuity, whose last complex transaction called for a lean value of 6.3 billion dollars, could now be reduced to extremely low levels—between 25 million pounds and zero.