A consortium led by private equity giant KKR and Singapore-based investment firm TIGA Investments will acquire the flexible office solutions provider The Executive Centre (TEC), the acquiree said in a statement on Tuesday.
As part of the transaction, the funds advised by HPEF Capital Partners and CVC Capital Partners will exit their investments in TEC. In 2019, it was reported that HPEF and CVC planned to sell their stakes in the company, amid growing competition in Asia’s flexible office solutions industry.
At the time, HPEF and CVC owned 70% and 20% stake respectively in TEC. The remaining 10% was held by Paul Salnikow, founder and CEO of TEC.
Following the latest acquisition, members of TEC’s management team will continue to own shares in the company.
Founded in 1994, Hong Kong-based TEC serves more than 32,000 members across 32 cities and 14 markets, including Greater China, Japan, South Korea, Southeast Asia, Australia, India, Sri Lanka, and the Middle East. It offers enterprise solutions, private offices, coworking and virtual spaces, and IT support and corporate concierge services.
TEC offers 63 office spaces in Greater China, 25 in India, nine in Japan, six in Singapore, six in South Korea, three in Indonesia, two in Vietnam, and one in the Philippines, according to its website.
The company is Asia’s third-largest flexible office space solutions provider and has an annual turnover of over $237 million.
Salnikow said TEC is pleased to welcome KKR and TIGA Investments as its new investors. “It’s a powerful partnership, well-matched to drive the continued performance and growth of TEC. I also extend a big thank you to HPEF Capital Partners and CVC Capital Partners for their investment tenure, during which we increased the size of the business, sevenfold,” he added.
In 2019, KKR had inked an agreement with Tivoli Capital, the creator of iLOV’iT Worklabs co-working space to develop office buildings in France’s largest cities. The investment was made through its Real Estate Partners Fund.
Last year, there were a number of fundraising activities in the flexible office landscape, including $5.5 million raised by India-based Awfis and $2.4 million raised by Malaysia-based WORQ. Most recently in April this year, WeWork India raised $26.6 million in a mix of debt and equity from undisclosed investors.