Home Business The Hut Group to buy Dermstore for £259 million from Target Corp

The Hut Group to buy Dermstore for £259 million from Target Corp

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In an announcement on Tuesday, Hut Group (LON: THG) said it will buy Dermstore for £259 million in cash – a move that’ll help its beauty brands secure a broader share in the U.S market. Dermstore is a California-based online retailer for skincare and beauty products that is currently a subsidiary of Target Corp.

The Hut Group shares are currently trading at £7.38 that represents a little under 20% growth since its initial public offering in September. The stock had plummeted to as low as £5.84 per share in mid-October. At the time of writing, the British e-commerce company headquartered at Manchester Airport has a market cap of £7.01 billion.

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THG acquires David Berryman and Claremont Ingredients

The Hut Group already has a range of prominent retail brands on its portfolio, including ESPA and Lookfantastic. In a bid to expand its footprint in the drinks business, the e-commerce company also said on Tuesday that it was investing another £59.5 million to acquire David Berryman and Claremont Ingredients.

The news comes only months after THG acquired luxury skincare brand, Perricone MD, for £44.43 million in cash.

According to the British company, the Dermstore acquisition will help boost its sales by roughly £133.30 million. It will also increase its core earnings on an adjusted basis by around £2.96 million for eleven months of its 2021 fiscal year.

The Hut Group also expressed confidence on Tuesday that it will receive approval from the regulators for its agreement with Dermstore before February 2021.  

CEO Matthew Moulding’s comments on Tuesday

Bringing Claremont and Berryman on its portfolio, THG added, will result in an around £15 million boost to sales and a roughly £4 million increase in adjusted core earnings in fiscal 2021. Commenting on announced acquisitions, CEO Matthew Moulding said on Tuesday:

“A key driver behind the decision to list THG on the London Stock Exchange just over three months ago was to enable the group to make major global investments, such as Dermstore.com. Accessing capital through a London listing has enabled us to accelerate our growth plans and build out a global leadership position within the exciting beauty industry.”

The Hut Group debuted on the London Stock Exchange in September 2020 at a per-share price of £6.25. The stock jumped 30% on its first day of public trading. The company raised £1.88 billion in its IPO.