Blackstone takes majority slice of The Office Group
Flexible workspace provider The Office Group (TOG) has been valued at £500 million after property investor Blackstone snapped up a controlling stake in the company.
Blackstone, whose real estate arm has 102 billion US dollars (£80 billion) of investor capital under management, has acquired a majority slice from Travelex founder Lloyd Dorfman.
TOG has more than 15,000 members and offers start-ups, entrepreneurs and businesses flexible workplaces and meeting rooms from 36 buildings.
Co-founder and chief executive Olly Olsen said the deal would drive further expansion.
He said: "Demand for flexible workspace continues to grow in the UK and globally.
"We are very excited, together with our new partner Blackstone, to move on to 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."
The move will see Mr Dorfman, Mr Olsen and his co-founder Charlie Green retain a shareholding in the group, with the deal expected to be complete by the end of this month.
However, the sale will bring to an end Mr Dorfman's tenure as chairman after taking up the position when he first invested in the company seven years ago.
Mr Green said: "Olly and I founded TOG in 2003. Since 2010, under Lloyd Dorfman's stewardship, TOG has grown from seven 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."
TOG offices - the majority of which are located in London - offer short-term leases which allow firms to exit quickly. It clients range from AOL, Dropbox and Pinterest to British Gas and Santander.
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 capitalise on the sector's continued growth."
TOG's revenues jumped 62% to £54.3 million for 2015, while earnings rose by a third to £15.4 million.
Mr Dorfman added: "In my seven years with the business, we have significantly expanded the portfolio and client base.
"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."