Despite its share price tumbling yesterday after an attack from a short-seller, Boohoo has acquired the remaining shares of PrettyLittleThing.
The Manchester-based online fashion group will buy the remaining 34% of shares from its minority shareholders, Umar Kamani and Paul Papworth, for £269.8m, potentially rising to £323.8m, subject to its stock market performance.
The acquisition will be made up of shares (£107.9m) and cash (£161.9m).
Umar Kamani is the son of Boohoo Executive Chairman, Mahmud Kamani. Both he and Papworth will remain in their current roles.
“This deal represents another milestone in our journey at PLT. Since being a disruptive start-up in 2012 to a global fashion brand that generates over half a billion pounds in sales today, I am incredibly proud of what my team and I have achieved in such a short period of time,” said Umar Kamani, Founder & CEO of PLT.
“The team and myself have big ambitions for the brand, and I’m incredibly excited about what the future holds for PLT as it embarks on the next stage of its global journey as a fully-owned part of the boohoo group.”
PrettyLittleThing has undergone major growth since Boohoo first invested in the company, its 66% stake in 2017 was bought for just £3.3m. At the time, the remaining 34% was being used to “incentivise” the management team.
In the year to February 2020, PrettyLittleThing generated net sales of £516m, compared to £55m for the year ending February 2017. Its year end profits after tax were £45.2m.
A week ago, Boohoo announced that it was setting aside cash to take advantage of mergers and acquisitions that are likely to emerge over the coming months. It stated that after the acquisition, it would retain £350m of net cash for such moves.
“We are delighted to be acquiring the remaining 34% stake in PLT. It has been a brand that has delivered strong growth as part of the boohoo group’s platform, and has a great future ahead of it in the UK and overseas,” added John Lyttle, Group CEO.
“I look forward to building on the great working relationship with Umar and the senior team at PLT as the Group continues to move forwards with its multi-brand strategy as part of its vision to lead the fashion e-commerce market globally.”
