15th Apr 2019 08:28
LONDON (Alliance News) - Office space provider IWG PLC on Monday said it has agreed to sell its Japanese operations to TKP Corp for GBP320 million cash.
The company, which provides office spaces under Regus brand, also agreed an exclusive master franchise agreement with TKP for the country.
IWG shares soared 16% after the news trading at 320.70 pence each, the best performing stock in the FTSE 250 index early Monday morning.
The company's Japanese business, Regus Japan Holdings, comprises of 130 flexible co-work centres. Completion of the sale is expected to occur in May 2019 subject to Japanese anti-trust clearance.
TKP, which is listed on the Tokyo Stock Exchange, provides conference rooms and banquet halls for rental.
Under the franchise agreement, IWG has granted TKP exclusive rights to the use of the Regus, Spaces and OpenOffice brands in Japan. IWG also has committed to provide on-going services and support to TKP, including access to global network and international sales and marketing platform, in return for an on-going fee.
The divested Japanese business generated GBP94.4 million in revenue and GBP20.6 million in earnings before interest, taxes, depreciation and amortisation. As at December 31, the total gross asset value of the divested business was GBP98.3 million.
IWG's Chief Executive Officer Mark Dixon will join the TKP board as a non-executive director, while Shingo Nishioka, country manager of IWG Japan since 2010, will transfer to the TKP group as part of the transaction.
Dixon said: "The transaction realises an attractive valuation for IWG's shareholders and re-affirms our strategy of capital efficient growth in IWG's global network with an increased emphasis on partnerships. We look forward to working with TKP for many years to continue our network development in Japan."
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