3 APAC co-working firms merge, eye IPO

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REGIONAL co-working companies the Hive, Common Ground and The Cluster have merged to form a new company - The Flexi Group - that wants to roll up other industry peers across Asia, and head for an initial public offering (IPO).

The merger was supported by an investment from Singapore-based Catcha Group and Malaysia's Emissary Capital, The Flexi Group announced on Tuesday (Aug 16).

Asked about the structure of the deal, The Flexi Group CEO Chris Edwards told The Business Times that it was in the form of a straight share swap and the creation of a new holding company. He did not disclose the deal value, nor how much Catcha and Emissary invested.

Edwards pointed to the fragmentation of the co-working industry in Asia as an opportunity, as many of the region's operators are unable to achieve scale to accelerate growth outside their home markets.

"The Flexi Group is working on a series of M&A deals across the region to further consolidate the industry and expand its portfolio," said Edwards, who was previously chief operating officer of the Hive.

"This may come in the form of a straight takeover and rebrand to one of our existing brands, or it may mean adding new brands to the group. Discussions are underway with local champions around the region as we look to build on our portfolio of profitable, strong operators."

Post-merger, The Flexi Group has 45 locations across 12 cities and 9 countries - including Hong Kong, Singapore, Malaysia, Australia, Thailand, Taiwan, Vietnam, the Philippines and Japan.

The company is taking an asset-light approach, partnering with landlords on joint ventures instead of taking on long-term rental agreements. Their landlord partners in Asia include Chinachem Group in Hong Kong, Petronas in Malaysia and Central Group in Thailand. Edwards expects the company to add up to 100 locations in the next 3 years.

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