US private equity firm Blackstone has agreed a takeover deal with UK flexible office space provider The Office Group (TOG), buying a majority stake from British enterpreneur Lloyd Dorfman which puts an enterprise value on the business of £500 mln (€572 mln).
The purchase was made on behalf of Blackstone Real Estate Partners Europe V, the mammoth fund which last week announced it had raised a record €7.8 bn at its final close.
'The traditional workspace is being redefined in gateway cities across the globe, as evolving business practices increase demand for flexible office space to suit the needs of the discerning modern occupier,' commented Anthony Myers, head of European Real Estate at Blackstone. 'We are excited about this opportunity and look forward to working with the team to capitalise on the sector’s continued growth.'
Lloyd Dorfman, together with TOG's co-founders Charlie Green and Olly Olsen, will remain shareholders in the enterprise post-transaction, with Green and Olsen continuing in their existing roles as co-CEOs of TOG.
'Demand for flexible workspace continues to grow in the UK and globally,' commented Olsen. 'We are very excited, together with our new partner, Blackstone, to move onto the next phase of our development which will allow us to accelerate TOG’s growth. We will do this by continuing to open new locations and defining new and innovative ways of addressing how people wish to work.'
'Olly and I founded TOG in 2003. Since 2010, under Lloyd Dorfman’s stewardship, TOG has grown from seven buildings to 36,' added Green.
TOG's client base currently exceeds 15,000 members, including businesses such as AOL, Dropbox, Pinterest, British Gas and Santander.
The transaction is expected to close in June 2017. The deal follows Carlyle's announcement last week of an investment drive into London's flexible office and co-working sector.
Rothschild acted as sole financial adviser to TOG on the sale.
Pictured (L-R) Olsen, Dorfman and Green
