WeWork is finally being made public through a SPAC

WeWork is finally being made public through a SPAC

by
WeWork announced on Friday morning that it is merging with BowX Acquisition, a blank check firm known as SPAC, in a deal that values ​​the office-sharing company at $ 9 billion. BowX’s shares rose more than 10% at the start of the trading session.

WeWork has been valued at $ 47 billion, making it one of the most valuable unicorn startups in the world.

WeWork will receive about $ 1.3 billion in cash as part of the deal to help fund future growth plans, the company said in a press release about SPAC.

A large part of this – $ 800 million – will come from a group of list A investors that includes venture capital firm Insight Partners, real estate leader Starwood Capital Group and investment giants Fidelity and Black stone (BLK). (Deven Parekh of Insight is also joining the board.)

WeWork added that its business has held up reasonably well over the past year, although many companies have not used offices, as more employees work from home during the Covid-19 pandemic.

The company also said it had left more than 100 underperforming locations in December 2020. Large companies now account for about half of their customers, a significant 10% increase in 2015. WeWork has also changed more of its members for long-term leases as opposed to monthly commitments.

WeWork’s sales in 2020, excluding China, were flat compared to 2019 at $ 3.2 billion. (WeWork sold a majority stake in its business in China last year.) It has a pipeline of $ 4 billion in sales for 2021, with an estimated $ 1.5 billion of that as already committed revenue.

Current CEO Sandeep Mathrani, a veteran of the real estate industry who joined the company a year ago, will remain as CEO and Marcelo Claure of SoftBank will remain as executive president.
Celebrities including A-Rod and Ciara are joining SPACs. What could go wrong?

“WeWork spent the past year transforming the business and reorienting its core, while simultaneously managing and innovating in the midst of a historic crisis,” said Mathrani in the statement. “As a result, WeWork has emerged as a global leader in flexible space with a stronger value proposition than ever.”

BowX’s Vivek Ranadivé, a former software executive who also owns the NBA’s Sacramento Kings, is joining WeWork’s board. (NBA legend Shaquille O’Neal, who also works for the Turner Sports division of WarnerMedia, CNN’s father, is also a consultant with BowX.)

The WeWork transaction is the latest in a flurry of SPACs that has brought private companies to Wall Street in the past two years.

Richard Branson galactic virgin (SPCE), QuantumScape, a maker of electric vehicle batteries backed by Bill Gates, and sports betting giant DraftKings went public through blank check mergers.

CNN’s Sara Ashley O’Brien contributed to this story.

.Source