KKR has made a profit of more than 300% by selling its minority stake in The Hut Group during the online health and beauty retailer’s initial public offering on the London Stock Exchange.

US-based KKR sold its 20% stake for £448m just six years after investing £100m in the British e-commerce business. KKR’s intention to sell was revealed in an August statement. A spokesperson for KKR was not immediately available to comment today.

The Hut Group’s shares trade at 640 pence apiece at the time of writing, a 28% jump on their first day of trading from the IPO price of 500 pence. Today’s rally gives the firm a market cap of £6.9bn.

The Hut Group’s IPO is the UK’s biggest since the start of the Covid-19 pandemic. The company netted £920m from the share sale, while existing shareholders, including KKR, shared gross proceeds of £961m, according to a statement.

Before the Hut Group deal, there were just nine UK IPOs so far this year, according to Dealogic data, raising a total of $865m. UK companies raised nearly $4bn through IPOs in 2019, according to Private Equity News’s sister publication Financial News.

The company announced earlier this month that BlackRock, Henderson Global Investors and the Qatar Investment Authority, a sovereign-wealth fund, had committed between them to buy £565m of shares at the offer price.

“I am delighted that THG has received such strong support from some of the world’s largest investors, which means we have been able to achieve a highly successful offer of shares in the company,” the group’s founder and CEO, Matthew Moulding, said in the statement. “The results of the offer are a clear validation of our business model, significant growth prospects, and recognition of the hard work and talent of all our colleagues.”

The Hut Group was launched in 2004 and focuses on selling own-brand or third-party branded goods to customers through more than 60 websites. Last year, it shipped 13 million orders to 190 countries.

Source: Private Equity News

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