Awfis Space Solutions divests facility management division to SMS Integrated Facility Services for Rs 27.5cr

Awfis Space Solutions Limited, a frontrunner in India‘s flexible workspace industry, has announced a significant strategic shift by entering into a Business Transfer Agreement with SMS Integrated Facility Services Private Limited (SMS IFS). This deal involves the sale of Awfis’s Facility Management division, Awfis Care, for Rs. 27.5 Crores. The transaction, which is expected to conclude within 120 days, is being facilitated with the guidance of Maple Capital Advisors, the sole advisor for Awfis, and Singhania & Co., which is providing legal counsel.

SMS Integrated Facility Services, a key player under Samara Capital, is a leader in the integrated facilities management sector across India. With operations spanning over 5,000 sites and serving more than 500 clients in Tier 1, Tier 2, and Tier 3 cities, SMS IFS is renowned for its comprehensive suite of services. These include soft services, technical and managed services, and sustainability consulting, supported by a workforce of more than 21,000 employees.

This divestiture marks a strategic pivot for Awfis, which aims to concentrate more effectively on its core competencies and growth areas. By transferring the Facility Management division to SMS IFS, Awfis stands to gain significantly from SMS’s advanced capabilities in technology-driven solutions, people management, and operational efficiency. This move will enable Awfis to reduce its administrative overheads and compliance burdens, ultimately enhancing operational effectiveness.

The financial implications of this transaction are noteworthy. The sale is anticipated to be cash flow accretive, unlocking working capital that will improve Awfis’s working capital cycle. This newly available liquidity is expected to boost Awfis’s financial flexibility, allowing the company to invest more aggressively in its core business areas, including expansion and innovation. Furthermore, Awfis forecasts an enhancement in its Return on Capital Employed (ROCE), optimizing its capital utilization to deliver higher, more sustainable returns for shareholders.

Amit Ramani, Managing Director and Chairman of Awfis Space Solutions, commented on the strategic importance of the deal: “We are thrilled to announce the divestiture of our Facility Management business to SMS Integrated Facility Services, a company that excels in technology-driven facilities management. This partnership allows us to reallocate our capital and management focus to our primary business segments, including bolstering our position in the flexible workspace market, expanding our geographical footprint, and driving advancements in customer experience and technological integration. This strategic move underscores our commitment to enhancing shareholder value through robust financial performance and operational excellence.”

Awfis Space Solutions Ltd. remains a leading provider of flexible workspace solutions in India. The company offers a diverse array of services, including coworking spaces, customized managed offices, and integrated workspace solutions through its Awfis Transform division. This division specializes in design and build services, catering to the evolving needs of modern work environments with an emphasis on adaptability and efficiency.

SMS Integrated Facility Services has a strong track record in facilities management, with its expertise extending to managing complex environments and ensuring high standards of service delivery. The company’s acquisition of Awfis Care represents a strategic expansion of its service portfolio, enabling it to leverage its established capabilities to deliver enhanced value to its clients.

This transaction not only reflects a significant operational shift for both companies but also highlights the dynamic nature of the flexible workspace and facilities management sectors in India. As companies like Awfis and SMS IFS continue to evolve and adapt to market demands, such strategic moves will likely shape the future landscape of these industries.