The two workspace giants have agreed to merge digital assets as they seek to create the industry’s most comprehensive flexible office marketplace.
As part of the deal, IWG will combine several of its apps and booking sites – including easyoffices.com, meetingo.com, Rovva and Worka – with the Instant Group.
The resulting platform will have than 30,000 locations across 175 countries and will feature membership plans, on-demand space, virtual offices, office booking, managed offices and consulting services.
IWG will invest £270m to acquire the shares of selling shareholders and provide capital for growth, while Instant will invest a further £50m into the company.
Following the asset merger, Instant will continue to operate as an independent business under CEO Tim Rodber – a former rugby player who joined the company in 2013.
Instant expects to spin off as a listed company on the US or UK markets by the end of 2023.
Booking.com for flex
For IWG, teaming up with Instant is an opportunity to create flexible work’s answer to Booking.com: a single, dominant “preferred platform” for booking, services and inventory management.
Mark Dixon, CEO of IWG, said that the investment positions IWG to be “a market leader in the digital-led future of workplace platforms”.
Although there are many other flexible office service providers, few are as comprehensive as Instant. Pre-merger, the company lists 15,000 offices around the world, and its clients include 48% of the FTSE 100 and 42% of the S&P 500.
Instant offers a range of flexible office options – from fully bespoke spaces managed by Instant itself to “ready-to-go” options operated by third parties – but it also advises on real estate portfolio management, including around sustainability, wellbeing and procurement.
Tim Rodber, Instant CEO, said: “The office market has been irrevocably altered by the pandemic and, by creating a marketplace that offers solutions for hundreds of thousands of clients, Instant will be at the forefront of this change.
“Our clients have been asking us to expand the reach and capabilities of our business to help solve the challenges of hybrid working. Similarly, our operator and landlord partners have been asking for a better route to market for their workspace products and an ability to monetise their excess capacity.
“This merger creates the largest independent global marketplace for flexible workspace and begins to directly answer these challenges, by simplifying where workers and the businesses they serve choose to work.”
How have markets reacted?
IWG’s share price rose 9.7% yesterday after the merger was announced. Although the workspace operator made the announcement alongside its annual results, the merger was the most significant detail in the report.
Elsewhere, the results showed that IWG is still recovering from the pandemic: revenue in 2021 was down 4.2%, while losses totalled £269.7m – an improvement on a loss of £645.3m in 2020.
Dixon described it as a “year of two halves”. Revenue fell 15.3% in the first half of the year under renewed restrictions around the world, but sales increased every quarter from March onwards, he said. By Q4, IWG experienced its best-selling months in its 30 year history.