Serviced office provider IWG PLC (LON:IWG) is selling off its Swiss business for £94mln, as part of a strategic partnership with family-owned banking firms J. Safra Group and P. Peress Group.
Under the terms of the collaboration announced on Monday, IWG has entered into a master franchise agreement, which will pass over exclusive franchising rights for its 38 Swiss co-working spaces to an entity jointly owned by the two private investment firms.
READ: Office giant IWG sells off Japanese business for £320mln
Once the sale is completed at the end of November, IWG will continue to provide on-going services and support including its marketing platform and infrastructure in return for an on-going service fee.
In April, the FTSE 250-listed offices group announced a similar deal with TKP Corporation to sell its Japanese business for £320mln, with exclusive franchising rights.
The move adds to IWG's strategic pivot towards an asset-light franchising business model.
In a statement, IWG chief executive Mark Dixon said he expects the deal with “seasoned real estate investors” will continue to enhance IWG’s brands, and “further demonstrates the continued interest from third parties wanting to operate IWG's brands across a wide range of geographies".
Buoyed by the deal, broker Peel Hunt upped its price target to 500p from 460p, although warning that this move could prove “too conservative” with one or two more similar arrangements expected this year.
The broker added that it was pleased that “sophisticated investors appear to be shrugging off any read-across from the WeWork psychodrama,” after the coworking company had to be rescued by Japanese investor Softbank in October over financing fears.
IWG shares were up 1% at 386.3p in early trading on Monday.
--Edited to add broker comment