WeWork is finally made public through a SPAC

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WeWork announced Friday morning that it would merge with BowX Acquisition, a blank check company known as SPAC, in a deal that values ​​the company that shares offices at $ 9 billion. Shares of BowX rose more than 10% in early trading.

WeWork was 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 on the SPAC.

A significant portion of those ($ 800 million) will come from a group of investors that includes venture capital firm Insight Partners, real estate leader Starwood Capital Group and investment giants Fidelity and BlackRock (BLK). (Deven Parekh of Insight also joins the board).

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

The company also said it had come out of more than 100 locations with lower performance than in December 2020. Large companies account for about half of their customers, a significant increase from 10% in 2015. WeWork has also moved more of its members to long-term leases as opposed to monthly commitments.

WeWork sales for 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 $ 4 billion pipeline in sales for 2021, with an estimated $ 1.5 billion, as it is already had committed to income.

Current CEO Sandeep Mathrani, a real estate veteran who joined the company a year ago, will continue to be CEO and Marcelo Claure of SoftBank will continue to be CEO.
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“WeWork has spent the past year transforming the business and reorienting its core, while simultaneously managing and innovating through a historic recession,” Mathrani said in the statement. “As a result, WeWork has become the world leader in flexible spaces with a stronger value proposition than ever before.”

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

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

By Richard Branson Virgin Galactic (SPCE), QuantumScape, a manufacturer of electric vehicle batteries backed by Bill Gates and sports betting giant DraftKings, have been made public through mergers of blank checks.

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

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