Serviced offices provider IWG has sold its Japanese operations to TKP Corporation for £320m and entered into an exclusive master franchise agreement for the country.
Tokyo Stock Exchange-listed TKP is to acquire 100% of the shares of Regus Japan Holdings and will have exclusive rights to the use of the Regus, Spaces and OpenOffice brands in Japan.
TKP will continue to operate the 130 flexible co-working centres under IWG’s brands and operating platform, and has committed to a development plan which will add significantly to IWG’s centre network in Japan.
Under the master franchise agreement IWG has committed to provide on-going services and support to TKP, including access to IWG’s brand portfolio, global network, international sales and marketing platform and operational infrastructure and technology, in return for an on-going platform fee linked to system-wide revenues in Japan.
IWG said completion of the deal was expected to occur next month and that the proceeds from the sale will be used for the company’s general corporate purposes.
In addition, IWG chief executive Mark Dixon will become a non-executive director at TKP.
Dixon said: “Partnering and franchising are increasingly important elements of our growth strategy and TKP is an outstanding partner for IWG in Japan, with strong local expertise and leadership in adjacent markets and a complementary network of operations.
“The transaction realises an attractive valuation for IWG’s shareholders and reaffirms our strategy of capital-efficient growth in IWG’s global network with an increased emphasis on partnerships.”
IWG’s Japanese business contributed £94.4m to the group’s revenue and generated EBITDA of £20.6m in 2018. The total gross asset value of the divested business as at 31 December 2018 was £98.3m.
TKP is the leading provider of conference rooms and banquet halls for rental in Japan, operating from 249 locations across the country.
Rothschild & Co acted as sole financial adviser to IWG on the transaction; Mizuho acted as sole financial adviser to TKP.
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