Bowmark, MML to exit The Instant Group in deal with IWG

Wahida Ahmed
08 March 2022

Tweet
Facebook
LinkedIn
Google plus
Send to

Bowmark Capital and MML Capital are exiting The Instant Group in a deal that will see the corporate real estate services and office management provider merge with key digital assets of IWG.

According to a stock exchange release, UK-listed flexible workspace solutions provider IWG will invest net cash of around GBP 270m to acquire the shares from the selling shareholders and provide growth capital.

The Instant Group's management will invest a further GBP 50m into the company. They will retain a significant equity stake and continue to run the business.

The combined group, which will include IWG's digital businesses such as easyoffices.com, meetingo.com, Rovva and Worka, has a vision of creating an independent marketplace for flexible workspaces as a return to work for many businesses is on the horizon.

The new group is expected, on a pre-synergy basis, to nearly double its EBITDA in 2022 to around GBP 31m. Post the merger and with synergies, the EBITDA is expected to be significantly higher, according to the stock exchange release.

The newly merged company is expected to be spun out by the end of 2023 via a listing on the US or UK markets, according to the stock exchange release.

IWG announced in November it was reviewing a possible separation of its digital and technology assets from its intellectual property and property ownership business.

The Instant Group's headcount will increase to more than 500 employees from 300 following the merger, according to a press release. The business has grown 25% CAGR in the last 5 years.

Sponsor ownership
Bowmark invested in The Instant Group through Bowmark Capital V in June 2018 acquiring a majority stake in the business. MML, which held a minority stake since 2012, and management reinvested in the business in the deal.

Bowmark's Fund V held a final close on its hard-cap of GBP 375m, surpassing its target of GBP 350m, in January 2014, according to Unquote Data. The fund closed after only 10 weeks on the road, having been launched in October 2013.

MML's reinvestment was made through Fund VI.

Company
The Instant Group was founded in 1999 and is headquartered in London. It provides flexible workspace services, which include real estate procurement and office management.

The merger will allow the company to offer an array of services to its clients including office booking and virtual offices as well as consulting through its acquisition of Incendium in 2019, according to a statement. It will consolidate 25,000 workspaces following the merger.

Clients of the business include 45% of the FTSE 100 and 40% of the S&P 500.

People
Bowmark Capital - Tom Shelford (partner).
MML Capital Partners – Luke Jones (partner).
The Instant Group - Tim Rodber (CEO); Nick Land (chairman).
IWG – Mark Dixon (founder).

Advisers
Vendor (Bowmark Capital) – Rothschild (corporate finance); Macfarlanes (legal).
Acquirer - Barclays (corporate finance); HSBC (corporate finance).