IWG enters sale-and-license deal over Swiss assets

Workspace operator IWG has entered into a strategic partnership with the J. Safra Group and the P. Peress Group over its workspace business in Switzerland, it announced on Monday.

The FTSE 250 company said it would divest of its interests in the market to an entity jointly owned by the J. Safra Group and the P. Peress Group, and would enter into an exclusive master franchise agreement with the purchaser.

It said the transaction followed on from similar deals completed earlier in the year between IWG and TKP Corporation, in respect of the divestment of IWG's businesses in Japan and Taiwan and the related franchise agreements there.

IWG said the J. Safra Group, with total assets under management of more than $249bn (£192.53bn) and aggregate stockholders' equity of $18.9bn, is controlled by the Joseph Safra family.

It consists of privately-owned banks under the Safra name, and investment holdings in asset based business sectors such as real estate and agribusiness.

The P. Peress Group, meanwhile, is controlled by the Peress family and has global investment holdings and interests in commercial, residential, operational and lifestyle related real estate.

IWG and the purchaser had entered into definitive sale and purchase agreements for the entire issued share capital of IWG's subsidiaries in Switzerland, the board confirmed, which had 38 flexible coworking locations as at 30 September.

The company said it would receive gross consideration of CHF 120m (£93.96m) payable in cash at completion, subject to completion accounts adjustments for cash, debt and working capital.

Completion was expected to occur at the end of November.

IWG and the purchaser had also entered into a long-term master franchise agreement, the board reiterated, which provided the purchaser with exclusive rights to the use of IWG's brands in Switzerland.

The purchaser would continue to operate the existing centres under IWG's brands and operating platform, and has committed to a development plan which would add “significantly” to IWG's centre network in that country.

IWG said it would provide on-going services and support to the purchaser, including access to IWG's brand portfolio, global network, leading international sales and marketing platform and operational infrastructure and technology, in return for an on-going service fee linked to system-wide revenues in the franchised territories.

“We are delighted to have entered into this strategic partnership with the J. Safra Group and the P. Peress Group,” said IWG chief executive officer Mark Dixon.

“Both groups are seasoned real estate investors with deep knowledge of our markets, and we are entirely confident they will augment the continued growth of IWG and its brands.

“This transaction builds on the successful completion of similar deals in Japan and Taiwan earlier this year and further demonstrates the continued interest from third parties wanting to operate IWG's brands across a wide range of geographies.”

Philippe Peress, on behalf of the acquiring shareholders, said they were “delighted” to partner with the IWG team.

“IWG are the leading global co - working operator with a strong position of leadership in Switzerland.

“With the support of the management team, valued employees, and thanks to our expertise and deep network in Switzerland we look forward to expanding this presence in the coming years.”

As at 0913 GMT, shares in IWG were up 3.03% at 394.6p.