CVC Capital swoops on the digital arm of office firm IWG
>
Private equity group CVC Capital dives into the digital arm of office firm IWG
Private equity emerged in the digital arm of office company IWG.
CVC Capital, whose portfolio includes interests in Six Nations Rugby and the RAC, is one of several candidates approaching the FTSE 250 company about the potential purchase of The Instant Group (TIG), which advises companies on their office space needs.
The division is believed to have a price tag of as much as £1.5bn, higher than IWG’s current market value after a share price collapse, as the slowdown in the global economy fueled fears over office demand.
Target Audience: CVC is one of several candidates IWG is approaching for the potential purchase of The Instant Group, which advises companies on their office space needs.
These concerns were heightened in August when IWG reported a larger-than-expected half-year loss of just over £70 million and again earlier this month when it warned that annual gains would be at the lower end of market forecasts.
Shares of the company have fallen 40 percent so far this year. Concerns about the economy in general have also hit IWG’s US rival WeWork, whose stock price has fallen nearly 72 percent since the start of 2022.
The news of a possible deal for TIG comes after his boss Tim Rodber sold the company to several private equity firms in recent weeks following several cold-hearted approaches, according to Sky News, citing banking sources.
IWG shares rose 26.8 percent, or 35.95p, to 169.95p after the report.
It is unknown how far the talks with CVC are, but a deal to sell the division could lead to the breakup of the entire group.
Splitting up IWG, formerly known as Regus, has been considered in the past by founder and billionaire CEO Mark Dixon, who is also the company’s largest shareholder with a 28.7 percent stake.
Dixon previously discussed the acquisition of the company in 2019 and held talks with several private equity groups after it rejected an approach a year earlier from Canadian firms Brookfield Asset Management and Onex that offered 280 pence per share, valuing the group at about £2.5 billion.
IWG also held preliminary discussions with New York-based private equity group CC Capital last year regarding the sale of all or part of the company.
Dixon is believed to believe that IWG is undervalued in the public market and that a deal could help increase its value.
In addition to TIG, IWG’s brands include luxury workspace company Signature, Basepoint and flexible office space brand Central Working.
In total, the group is active in 120 countries at some 3,300 locations.