IFG loaned £13.7m to acquire Northcore and Shade Station

Hawkwing plc has announced that it has provided Internet Fusion Group Limited (“Internet Fusion Group” or “IFG”) with a secured loan of £13.7 million to fund two acquisitions and the associated transaction costs of these acquisitions. The two acquisitions are Northcore Limited, an outdoor surf accessories and lifestyle clothing brand, and Shade Station, one of the UK’s largest independent online retailers of sunglasses.

IFG has paid an initial consideration of £2.25 million for Northcore Limited and £10 million for Shade Station, both on a debt and cash-free basis. There is a conditional earnout of up to £1.75 million for Northcore Limited and £5 million for Shade Station, which both depend on the respective future trading performance of each company.

If the proposed acquisition of IFG by Hawkwing does not take place on or prior to 31 March 2022, the IFG Loan will carry an 8% per annum interest rate from the date of drawdown and is for a three-year term. The IFG Loan also carries a redemption premium depending on when the IFG Loan is repaid. The IFG Loan is secured against the assets of the acquired businesses.

Additional investment into IFG

Funds managed by Marshall Wace have also made a direct investment into IFG of £6.0 million at an enterprise value of £115 million. This investment will provide IFG with additional capital to support its growth plans.

Keith Sadler, Senior Independent Non-Executive Director of Hawkwing, commented: “We are delighted to support IFG in its buy-and-build strategy and on its acquisition of Northcore and Shade Station, two businesses that expand and enhance IFG’s suite of well-respected speciality e-commerce businesses.

“As IFG continues to expand, the investment from Marshall Wace is another strong endorsement of its business quality, its management team and their growth strategy. Our proposed acquisition of IFG continues to progress and we look forward to updating the market in due course.”

John Browett, Executive Chairman of the Management Board of Internet Fusion Group, said: “These acquisitions represent another significant step in the execution of our buy-and-build strategy.

“We have a compelling track record of acquiring profitable specialty retailers and transforming their performance and growth prospects through our Reactor platform, and we look forward to accelerating the future performance of Northcore and Shade Station.

“Both are fantastic businesses which offer authentic online retail experiences for people browsing for high-quality products from like-minded brands. Separately, the investments in our business by Hawkwing and Marshall Wace demonstrate strong investor confidence in our model, and I am excited by the momentum we continue to build in the market.”