Large flexible office group IWG is in talks to list its US business to compete with rival WeWork, which filed its IPO plan this month.
As reported by Sky News, Mark Dixon, IWG’s CEO, is looking to create a separately listed company in New York and is in discussions with investment banks.
The US listing, if pursued, is predicted to be worth as much as £3bn. It was also reported IWG will only hire bankers with no role in WeWork’s IPO.
Founded in 1989, IWG is considered to be the world’s largest flex provider, with 3,300 locations in 1,000 towns and cities, in 110 countries. The firm has multiple flex brands under its umbrella including Regus, Spaces, HQ, Signature by Regus, and No18.
The listed company is currently valued at £3.64bn on the London Stock Exchange, with the US business included within that. The turnover for IWG’s Americas region, US, Canada and Latin America, in 2018 was £961.7m, with a profit of £207.6m and a gross margin of 21.6%.
The UK region turnover was almost a third of that at £375.6m, making a profit of £49.3m and a gross margin of 13.1%.
IWG’s competitor WeWork filed a proposed offering of $1bn with the US Securities & Exchange Commission. The IPO is expected to raise much more when it reportedly goes public in September. The loss-making firm needs to raise more due to the firm’s debts, with WeWork’s prospectus revealing a net loss of $690m in the first half of this year alone.
The flexible office space is bubbling with activity, with rival Knotel gaining unicorn status with a valuation of over $1bn last week, after raising a $400m funding round led by the investment arm of Kuwait’s Sovereign Wealth Fund, Wafra.
IWG’s Spaces is to take the whole of 125 Deansgate in Manchester city centre, a 116,000 sq ft office currently under construction and set to open in early 2020.
Other competitors to IWG include The Office Group, Fora Space, Work.Life, Techspace, Runway East, Level 39 and Third Door. There’s also a long line of property companies pushing into the space, including the Crown Estate, global surveyor CBRE’s Hana, developer British Land’s Storey, Savill’s Pivot, and HB Reavis’ HubHub.