DAVY VIEW

The collaboration agreement THG has entered into with Softbank puts a marker down for the valuation of its high-growth enterprise SaaS division, THG Ingenuity. The implied value of £4.5bn is a 36% premium to our sum-of-the-parts value (see “Initiation note”) of £3.3bn and should be well received by the market. Today’s announcements underscore the pro-growth, pro-investment mindset of the group, which we feel the market is under-appreciating. The completion of the US$1.05bn placing provides balance sheet flexibility and firepower for THG to continue to execute further acquisitions, which are imminent.