WeWork agreed to merge with a special purpose acquisition company, according to people familiar with the matter, into a deal that would make the shared office provider public almost two years after its failure to launch a traditional IPO.
The planned merger with BowX Acquisition Corp. SPAC would value WeWork at $ 9 billion, including debt, people said. WeWork would also raise $ 1.3 billion, including $ 800 million in a so-called private equity investment, or PIPE, from Insight Partners, funds managed by Starwood Capital Group, Fidelity Management and others, people said.
In January, The Wall Street Journal reported that WeWork was in negotiations to combine with BowX.
WeWork is a major player in the flexible office market. She signs long-term lease agreements with landlords and, after renovating and furnishing a space, subleases small offices or even entire buildings for tenants for just one month at a time. Should the merger close in the coming months as expected, it would end what has been a long and bumpy road towards the WeWork listing.
The company is taking advantage of a torrent of new SPACs to accomplish what it failed to achieve in 2019, when public investors rejected the loss-making company and its visionary but erratic leader, Adam Neumann, who subsequently resigned as president and CEO. Stricken further by the coronavirus pandemic, which has emptied offices across the country, WeWork has closed locations, renegotiated rents and cut thousands of jobs in an attempt to cut expenses.