New York-based global private equity firm Blackstone (NYSE: BX) said its Real Estate Partners Europe V fund agreed to acquire a majority interest in The Office Group (TOG) from Lloyd Dorfman CBE putting an enterprise value on TOG of £500 million.
TOG is a leading provider of design-led, flexible workspace and pioneered the concept in Britain. TOG has 36 buildings, mainly across central London, housing a fast growing and diverse client base of over 15,000 members. The company’s clients currently include: AOL, Dropbox and Pinterest, as well as large corporates such as British Gas, and Santander.
TOG allows members to work across multiple locations and enables companies to grow, downsize or exit a space quickly and cost effectively. TOG is focused on creating inspirational workplaces with a sense of community, through the inclusion of common spaces such as libraries, screening rooms, cafes, gyms and roof gardens.
Dorfman and TOG co-founders Charlie Green and Olly Olsen will remain shareholders in the group post-transaction and Green and Olsen will continue in their existing roles as co-CEOs of TOG. The deal is expected to close in June 2017.
Rothschild acted as sole financial adviser to TOG on the sale.
“Demand for flexible workspace continues to grow in the UK and globally,” said TOG co-founder Olly 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,” co-founder Charlie Green added. “Since 2010, under Lloyd Dorfman’s stewardship, TOG has grown from 7 buildings to 36, and we thank Lloyd for his investment and all his support. This is the start of a new and very exciting era for TOG.”
“In my seven years with the business, we have significantly expanded the portfolio and client base,” said TOG Chairman Lloyd Dorfman. “TOG is a dynamic and innovative business, with buildings in optimal locations operating in a market whose time has come. London is the leading city in the world for flexible office space while current trends in the labour market show growing appetite for this type of work environment. Charlie and Olly are the best in the business, and have been an absolute pleasure to work with.”
Dorfman is a British entrepreneur and philanthropist who founded Travelex, today known as Travelex Group, the world’s largest retailer of foreign exchange.
Anthony Myers, Head of European Real Estate at Blackstone, said: “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. We are excited about this opportunity and look forward to working with the team to capitalize on the sector’s continued growth.”
Blackstone is a global leader in real estate investing. Founded in 1991, Blackstone’s real estate businesshas approximately $102 billion in investor capital under management. The firm’s real estate portfolio includes hotel, office, retail, industrial and residential properties in the US, Europe, Asia and Latin America. Major holdings include Hilton Worldwide, Invitation Homes (single family homes), OfficeFirst and prime office buildings in the world’s major cities. The firm also operates one of the leading real estate finance platforms, including management of the publicly traded Blackstone Mortgage Trust.
The deal comes two weeks after Blackstone agreed to sell its pan European logistics company Logicor, to China’s sovereign wealth fund China Investment Corporation (CIC) for €12.25 billion, as reported by ExitHub.
Photo: Lloyd Dorfman CBE, Chairman of The Office Group. (Courtesy, The Prince’s Trust)