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CVC approaches IWG for $1.7bn buyout deal of The Instant Group

CVC approaches IWG for $1.7bn buyout deal of The Instant Group

Luxembourg-based private equity firm CVC Capital Partners has approached British real estate major IWG for a £1.5 billion ($1.7 billion) deal for its digital business arm, The Instant Group (TIG).

It has been reported that CVC, which owns a stake in Six Nations Rugby, is among the buyout companies that have approached IWG for the acquisition, which could lead to a broader break-up of Britain’s largest serviced offices provider.

According to sources, TIG’s CEO, Tim Rodber, has been marketing the business to multiple private equity firms recently after a series of unsolicited approaches.

IWG has hired American financial services provider Well Fargo for advice on the possible disposal.

If the deal is successful, it will be larger than IWG’s current market value, especially with IWG having seen its share value more than halve in the last year.

This decline reflected investors’ concerns regarding demand for offices amid a global economic downturn, with IWG announcing a half-year loss of £70 million ($80 million) in August.

Mark Dixon, Founder and CEO of IWG, has also been looking into options to take the company private or split it for quite a while. Some of its affiliates include Signature, Basepoint, and Regus.

Earlier this year, the group said that it would merge its tech and digital assets with TIG, and injected £270 million ($309 million) in cash into the combined entity.

Last week, IWG stated that the merger was going as per plan and was witnessing the EBITDA benefits from it coming as anticipated.

Dixon commented that the company was being seriously undervalued by public market investors. He also noted that IWG had been contemplating various deals, such as combining Worka with a US-listed special purpose acquisition company.

IWG also had a tentative discussion with American private equity firm CC Capital for selling either a part or the entire group. However, in recent years it adopted a franchise model where it sold its assets in other countries and licensed its brand to new operators.

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Meghna Singh

An English Literature graduate, Meghna Singh ventured into the profession of content development to incorporate her knack for writing articles across verticals including technology, healthcare, business, and alike for News Origins and Newsorigins. She has also completed her MBA in Tourism and worked as a content creator in the field of product development.