Flexible office giant IWG is to merge its digital and tech-focused assets with fellow flex company the Instant Group, as part of a £270m investment to form a new office business.
IWG will buy the stakes of selling shareholders, while the Instant Group’s management will put about £50m into the combined business, which will be spun out next year through a listing either in the US or the UK.
The London-listed company, which owns the Spaces and Regus brands, said it expected the merger to yield “significantly higher” earnings. Directors at the Instant Group will run the business.
Instant Group boss Tim Rodber said clients had been asking the company to “expand our capabilities and geographic reach”. He added: “Similarly, our partners that provide flexible workspace solutions have been asking for a better route to market for their products and an ability to monetise their capacity.
“This merger creates a marketplace for flexible workspace and begins to directly answer these challenges by simplifying where workers and the businesses they serve choose to work.”
It comes as IWG reported a £259.4m loss last year, compared with a loss of £613.3m a year earlier. The company is the biggest flexible office group in the world, operating in more than 3,300 locations across 20 countries.
On the results, IWG boss Mark Dixon said: “This was a year of two halves that culminated in a period of significant positive change. In a matter of a few months, we moved from one of the most challenging moments in our company’s history at the beginning of 2021, when we experienced the highest concentration of lockdowns, which contributed to the losses reported for the year ended 31 December 2021, to a point where sales growth is now ahead of pre-pandemic levels.
“In fact, we experienced the best-selling months in our more than 30-year history in the year’s fourth quarter. Our global membership continues to grow and over the year we added 2m new network users.”
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