MERI.L Regulatory News (MERI)

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This announcement contains inside information.

16 September 2020

Merian Chrysalis Investment Company Limited (the "Company" or "Merian Chrysalis")

The Hut Group IPO Update

The Company notes today's flotation of The Hut Group plc ("THG") on the London Stock Exchange. The Board and the Investment Adviser would like to congratulate THG's management on a process that has seen significant global interest in its Initial Public Offering ("IPO").

Due to its presence on the shareholder register of THG, and its ability to underwrite a substantial part of the IPO, the Company's Investment Adviser, Merian Global Investors (UK) Limited ("MGI") was named as one of five global cornerstone investors, securing an allocation of £90 million. Given its ability to provide its own crossover offering, the Company can today confirm that it is investing approximately £14.4 million via the IPO, as part of MGI's allocation.

As noted in the Net Asset Value ("NAV") announcement issued on 1 September 2020, the impact of revaluing THG at the IPO price, versus the carrying value as of 30 June 2020, is an uplift of approximately 17%. At the IPO price, the Company's THG holding will be approximately £79 million, and the increase to the Company's NAV per share is approximately 2.8p on a gross basis, compared with the previously reported NAV per share of 137.26p as of 30 June 2020.

Liquidity position

In its NAV announcement of 1 September 2020, the Company disclosed a gross cash position of approximately £54 million. Following the recent investment in Klarna Holding AB, announced on 15 September 2020, and THG, the Company's approximate gross cash position is currently £16 million.

Following THG's IPO, the total liquidity position of the Company - defined as gross cash plus listed assets - has now improved to approximately £95 million, based on THG's IPO price.

Background

Merian Chrysalis was set up to pursue a crossover investing strategy, allowing late-stage, private-growth businesses access to a different type of capital - one that supports them to make the transition to a listed environment. THG's IPO marks the first of the Company's portfolio assets to make the move to public markets and represents a significant milestone in the Company's development, as well as a tangible endorsement of the attractiveness of the Company's offering for investee businesses.

The Investment Adviser's engagement with THG started in early 2017. In October 2017, a number of MGI's open-ended UK small- and mid-cap equity funds made a significant injection of primary capital, amounting to approximately £125 million, to help THG continue its strategy of acquiring beauty brands to leverage its infrastructure platform (Ingenuity). Following subsequent investments, both primary and secondary, the total MGI investment, at cost, has been approximately £175 million, prior to the IPO.

THG formed part of Merian Chrysalis's "seed portfolio" shortly after its IPO in late 2018, with a subsequent further addition in October 2019. Over the approximately two years that the Company has owned THG, it has delivered an internal rate of return of circa 82%, based on THG's IPO valuation.

Richard Watts, co-manager of Merian Chrysalis comments:

"We have been very proud to support Matt Moulding and his team as they have developed a world-class business and are delighted to continue the journey with them as THG moves into the listed arena. The penetration of online retail continues to accelerate, and we believe THG's unique proposition, offering both market-leading lifestyle brands and providing e-commerce infrastructure to third parties, means it is well positioned to continue benefiting from this trend."

Nick Williamson, co-manager of Merian Chrysalis adds:

"THG's flotation is a significant and exciting moment in the development of Merian Chrysalis. It represents the portfolio's first IPO and also demonstrates the strength of our crossover proposition, both in supporting companies as they navigate the listing process, but also in capturing significant value for investors who have traditionally found it difficult to access private markets."

-ENDS-

LEI: 213800F9SQ753JQHSW24

A copy of this announcement will be available on the Company's website at https://www.merian.com/chrysalis/.