IWG PLC Strategic Partnership Transaction in Taiwan (5274I)
August 09 2019 - 1:00AM
UK Regulatory
TIDMIWG TIDMTTM
RNS Number : 5274I
IWG PLC
09 August 2019
Not for release, publication or distribution, in whole or in
part, in or into any jurisdiction where to do so would constitute a
violation of the relevant laws of such jurisdictions.
This announcement contains inside information in relation to IWG
plc
9 August 2019
IWG plc ("IWG" or the "Group")
Strategic Partnership Transaction in Taiwan
IWG, the global operator of leading co-work and workspace
brands, is pleased to announce that it has entered into a second
strategic partnership with TKP Corporation ("TKP"). IWG will divest
its Taiwanese operations to TKP and the parties have agreed an
exclusive master franchise agreement for the country (the
"Transaction"). The Transaction follows the analogous deal, agreed
between IWG and TKP in April 2019, in respect of the divestment of
IWG's Japanese operations to TKP and related franchise agreement in
respect of the Japan market.
IWG and TKP have entered into a definitive sale and purchase
agreement for the entire outstanding capital contributions of IWG's
Taiwanese subsidiaries, which together, consist of 14 flexible
co-work centres. IWG will receive gross consideration of GBP22.7
million payable in cash at completion, subject to completion
accounts adjustments for cash, debt and working capital. Completion
is expected to occur in September 2019 and is conditional only on
the approval of the Transaction by the Taiwanese Investment
Commission of the Ministry of Economic Affairs.
The long term master franchise agreement entered into by the
parties provides TKP with exclusive rights to the use of the HQ,
Regus and SPACES brands in Taiwan, and allows TKP to continue to
operate the Taiwanese centres under IWG's brands and operating
platform. As with the Japanese partnership signed earlier this
year, under the Taiwanese agreement: (i) TKP has committed to a
development plan which will add significantly to IWG's centre
network in Taiwan, and (ii) IWG (as master franchisor) has
committed to provide on-going services and support to TKP (as
master franchisee) in return for an on-going platform fee linked to
system-wide revenues in Taiwan.
The Transaction further demonstrates the strong momentum in
IWG's franchising strategy and the interest from third parties
wanting to operate IWG brands across a wide range of geographies,
which will enable the company to grow more rapidly in this exciting
market.
The Taiwanese business contributed GBP6.8 million to Group
revenue and generated EBITDA of GBP1.4 million in 2018. The total
gross asset value of the divested business as at 31 December 2018
was GBP9.9 million.
Proceeds from the divestment will be used for the Group's
general corporate purposes.
The Transaction, when aggregated with IWG's disposal of its
Japanese operations agreed in April 2019 and announced on 15 April
2019, is to be treated as a class 2 transaction for the purposes of
the UK Financial Conduct Authority's Listing Rules.
The person responsible for arranging the release of this
announcement on behalf of IWG is Tim Regan, Company Secretary.
Enquiries:
IWG plc
Tim Regan, Company Secretary
Wayne Gerry, Group Investor Relations
Director +41 (0)41 723 2353
Brunswick Group LLP
Nick Cosgrove
Oli Sherwood +44 (0)20 7404 5959
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END
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