For immediate release

8 March 2022

IWG PLC

MERGER OF IWG'S DIGITAL AND TECHNOLOGY ASSETS WITH THE INSTANT GROUP

IWG plc ("IWG" or the "Company"), the world's leading supplier of flexible workspace solutions, is pleased to announce that it has entered into contract to merge certain of its digital and technology assets with The Instant Group, a global business which operates as the world's leading independent provider of flexible workspace platform and services (the "Merger").  IWG will invest net cash of c.£270m to acquire the shares of selling shareholders and provide capital for growth with The Instant Group management investing a further c.£50m into the company.

Highlights

-     This will create the world's leading independent fully integrated workspace platform merging IWG's industry facing digital technology assets and The Instant Group's leading digital expertise

-     The Instant Group is a highly attractive business in the flexible workspace platforms market, operating globally delivering solutions in 18 countries across EMEA, Americas and APAC

-     The Instant Group has award winning digital marketing capabilities and provides solutions to 48% of the FTSE 100 and 42% of the S&P 500

-     It is expected that the business will, on a pre-synergy basis, nearly double its EBITDA in 2022 to approximately £31m. Post the merger and with synergies, the EBITDA is expected to be significantly higher

-     The directors believe the Merger will be earnings accretive in the first full year of ownership

-     Following completion, the key executive management of The Instant Group will run the business

-     It is anticipated that the newly merged company will be spun out by the end of 2023 via a listing on the US or UK markets, realising the value of the digital platform assets

Mark Dixon, IWG's Chief Executive Officer commented:

"I am delighted with the merger of IWG's digital assets with The Instant Group. It's a fantastic investment behind a world-class management team, positioning IWG to be a market leader in the digital-led future of workplace platforms. This creates a clear path for value creation and will harness the next generation of digital-native workers and the huge market potential of flexible working, building long-term and future-proof growth as the world's leading supplier of flexible workspace solutions."

Tim Rodber, The Instant Group's Chief Executive Officer commented:

"The office market has been irrevocably altered by the pandemic with hybrid working becoming the norm. Our clients have been asking us to expand our capabilities and geographic reach to help solve this challenge. Similarly, our partners that provide flexible workspace solutions have been asking for a better route to market for their products and an ability to monetise their capacity.

This merger creates a marketplace for flexible workspace and begins to directly answer these challenges by simplifying where workers and the businesses they serve choose to work."

Strategic Rationale

Market growth

·     30% of the global office market is expected to be made up of flexible office solutions by 2030 and the market for flexible workspace itself has grown on average by 7% year on year between 2010 and 2020

·     The Coronavirus pandemic has accelerated the move to flexible working, and the increased imperative for corporations to reduce fixed costs in their office estate will further augment the rate of market growth to c. 30% per annum

Digital platform

·     The company will be a global leader in the large, dynamic and fast growing flexible workspace booking platforms market

·     The company will be the preferred platform for booking, services and inventory management, following the similar models already successfully operating in the travel and hotel sectors

·     Bringing together more than 30 years of experience and investment in scheduling, inventory management, price optimisation and e-commerce, the platform will be leveraged to create best in class technology assets, fully automating buying journeys and customer lifecycle management

Global footprint

·     Delivery of independently procured solutions in more than 40 languages and 175 countries through accessing over 25,000 buildings

Breadth of products and services

·     The company will deliver end-to-end solutions including virtual offices, meeting rooms, flexible workspace and client dedicated managed offices. The Instant Group also has world class consulting capability to tackle ever more complex challenges such as hybrid working, new portfolio strategies or sustainability in the workspace

Independent management team

·     The company will be led by a best in class independent management team, each with extensive experience of business growth in the digital space and well placed to drive significant shareholder value

·     The Instant Group will operate as a commercially independent entity, with its own executive team and board

For further information please contact:

-     IWG: + 41 (0) 41 723 2353, Mark Dixon, Glyn Hughes, Wayne Gerry

-     Barclays: +44 (0) 20 7623 2323, Richard Probert, Tom Macdonald, Anjaneya Shiroor

-     HSBC: +44 (0)20 7991 8888, Sam McLennan, Ed Welsh, Stephanie Cornish

-     Brunswick Group: +44(0) 20 7404 5959, Nick Cosgrove, Peter Hesse

Additional information

-     Completion of the transaction is expected on March 10^th, 2022

-     Funding has been provided through facilities fully underwritten by HSBC and Barclays arranged alongside the amendment of the Company's  revolving credit facilities

The Instant Group Overview:

-     The Instant Group is a leading procurer of a combination of serviced office space for coworking, serviced or managed offices as well as commercial consulting services. These are delivered through the following segments

o  Managed: Offers fully bespoke workspaces built and fit-out to client specification for single-fee. The Instant Group manages the entire process from sourcing the property and landlord lease negotiation to design, fit-out and ultimately its operation. The Instant Group also manages the lease exit and any dilapidation obligations on behalf of the final client

o  Serviced: Procure ready-to-go, fully furnished and pre-cabled workspaces with full office management for clients. Serviced offices are operated by third party providers. Serviced office license agreements are available with terms ranging from one month onwards and therefore the solution offers a high level of flexibility to the client

o  Consulting: Consults on a number of strategic areas to help clients manage and develop their property portfolios including sustainability, wellbeing and productivity, portfolio agility, procurement and digital solutions

-     The Instant Group has a strong track record of revenue and EBITDA performance with revenue growth of CAGR ~20% and EBITDA growth of CAGR ~31% over the period CY2019 - CY2021. As at 31^st December 2021, The Instant Group had gross assets of £172m and made a loss before tax of £(18.5)m. 

-     The Instant Group's executive management team consists of:

o  Tim Rodber, CEO, and has been with The Instant Group since 2013. He has led the company in its growth as a dynamic, innovative and client centric solutions provider. Before joining The Instant Group, Tim was CEO Williams Lea. Tim began his career as an Army officer and as a successful rugby player

o  James Booth, CFO, and has been with The Instant Group since 2014. James has a track record in delivering best-in-class financial controls. He joined The Instant Group from the Choice Care Group, a private equity owned business. James started his career at PwC before spending 8 years with Phoenix Equity Partners

Important Notices

Barclays Bank PLC ("Barclays"), acting through its Investment Bank, which is authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulation Authority, is acting exclusively for IWG and no one else in connection with the Merger and will not be responsible to anyone other than IWG for providing the protections afforded to clients of Barclays nor for providing advice in relation to the Merger or any other matter referred to in this announcement.

HSBC Bank plc ("HSBC") , which is authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulation Authority, is acting exclusively for IWG and no one else in connection with the Merger and will not be responsible to anyone other than IWG for providing the protections afforded to clients of HSBC nor for providing advice in relation to the Merger or any other matter referred to in this announcement.