- IWG admitted that it is evaluating how separating its digital and technology businesses from its real estate assets could boost its value.
- This strategy may involve IWG splitting its owned buildings from its global franchises.
- The flexible workspace conglomerate will provide an update on its decision in H1 2022.
After months of rumors swirling, flexible workspace operator IWG has confirmed that it is weighing out options that would break up its businesses.
Although there have been no concrete decisions yet, IWG admitted that it is evaluating how separating its digital and technology businesses from its real estate assets could boost its value.
IWG said it is considering what would likely be a multi-billion pound breakup and provide an update during the first half of 2022.
Last September, Sky News reported that CEO Mark Dixon was assessing various methods of breaking up IWG into distinct companies.
This strategy may involve IWG splitting its owned buildings from its global franchises, which has rampantly expanded in recent years, or publicly listing its workspace booking app Worka through a floatation or a merger with a special purpose acquisition company.
However, Dixon has yet to specify which businesses may be impacted by the breakup.
“The potential to more broadly leverage the intellectual property of the group, together with the ownership structure of the property portfolio, is the subject of further review,” the company said in a trading statement.
This isn’t the first time the flex office operator has contemplated such a move. In 2019, it was revealed that IWG was considering selling off its coworking arm Spaces with the belief that it would be more valuable than the parent company.
Earlier this year, IWG warned that its profits for 2021 would be lower than anticipated due to slowed recovery from pandemic-related losses. In 2020, the company reported a loss of £620 million as people shifted to working from home.
“Accordingly, this will delay the anticipated recovery in our business and, given the operational gearing of the group, is expected to have a significant impact on the group’s results for 2021,” IWG said.
Still, the company says it is experiencing “unprecedented demand” from companies seeking flexible office space as they usher in an era of hybrid work arrangements.