IWG has announced that it will merge its digital assets with The Instant Group in a move that has caused the flexible workspace operator’s shares to spike.
IWG’s digital assets typically service office space bookings, while The Instant Group focuses on the flexible office market. IWG also owns Spaces and Regus, which cater to both flexible and serviced office space.
“We are merging our digital business with a company, which is serving the rest of the industry, to achieve a high growth rate and give more focus to the digital platform for the broader industry,” said Mark Dixon, CEO of IWG.
As pandemic restrictions ease up around the world, this new merger reflects a shift in the workspace industry, which sees landlords making moves to recover and tenants reconsidering their office footprint.
Many companies have made the commitment to a hybrid work model in the future, allowing employees to split their time between the office and remote working arrangements.
As part of the merger, IWG will invest around £270 million ($353.65 million) to purchase stakes of selling shareholders. At the same time, The Instant Group will invest £50 million ($65.6 million) into the merger that is expected to roll out by the end of 2023 through a listing either in the US or UK.
In 2021, IWG posted a loss before tax of £259.4 million ($340.49 million) compared to a £613.3 million ($805 million) loss the year prior.
Dixon added that the near-term goal will be to obtain strong profitability this year.