WeWork to go public in $9B SPAC deal

Flexible-office provider lost $3B in 2020

National /
Mar.March 26, 2021 09:00 AM
From left: Bow Capital's Vivek Ranadivé, Shaquille O’Neal and WeWork's Sandeep Mathrani (Getty)

From left: Bow Capital’s Vivek Ranadivé, Shaquille O’Neal and WeWork’s Sandeep Mathrani (Getty)

If at first you don’t succeed, try, try again: Two years after its failed IPO, WeWork has struck a deal to go public with a special-purpose acquisition company.

The merger with BowX Acquisition Corp. would value the embattled flexible-office company at $9 billion including debt — a fraction of its $47 billion valuation in 2019.

WeWork will get $1.3 billion in proceeds from the SPAC deal, including $800 million from a PIPE, or private investment in a public entity, according to the Wall Street Journal. PIPE investors reportedly include Insight Partners, funds managed by Starwood Capital Group, Fidelity Management and others.

The deal caps what’s been a long and arduous road over for the company, which failed to go public in 2019 after investors balked at its eye-popping losses and erratic behavior by co-founder Adam Neumann. Since Neumann’s ouster, CEO Sandeep Mathrani has worked to slash expenses through layoffs and by closing underperforming locations.

In January, the Journal reported that WeWork was in talks with at least two SPACs. It was also reportedly considering additional private investment.

Bow Capital is run by Vivek Ranadivé, a software executive and owner of the Sacramento Kings and founder of Tibco Software Inc. Basketball legend Shaquille O’Neal is an adviser.

WeWork lost $3.2 billion last year when the pandemic obliterated demand for office space, according to the Financial Times. Occupancy reportedly fell to 47 percent in 2020, down from 72 percent at the beginning of the year. Overall, WeWork reduced capital expenses to $49 million from $2.2 billion.

[WSJ] — E.B. Solomont





    Related Articles

    arrow_forward_ios
    Wendy Silverstein (Credit: Getty Images)
    Wendy Silverstein, co-head of WeWork’s real-estate fund, is out
    Wendy Silverstein, co-head of WeWork’s real-estate fund, is out
    WeWork CEO Adam Neumann (Credit: Getty Images and iStock)
    WeWork’s side businesses are fizzling
    WeWork’s side businesses are fizzling
    Sarah Pontius (Credit: Union College)
    Another head rolls at WeWork
    Another head rolls at WeWork
    SmartRent's Lucas Haldeman and Fifth Wall's Brendan Wallace (iStock)
    What SmartRent’s $2.2B SPAC means for multifamily
    What SmartRent’s $2.2B SPAC means for multifamily
    Glenn Sanford (Photo courtesy of eXp Realty)
    The Closing: Glenn Sanford
    The Closing: Glenn Sanford
    Rich Gomel, chief investment officer of Two Sigma Real Estate platform (Crunchbase)
    WeWork vet hired to launch Two Sigma’s real estate fund
    WeWork vet hired to launch Two Sigma’s real estate fund
    WeWork CEO Sandeep Mathrani. (Getty, WeWork)
    WeWork will accept Bitcoin for membership fees
    WeWork will accept Bitcoin for membership fees
    Fifth Wall’s Brendan Wallace (right) and Andriy Mykhaylovskyy (Facebook/Fifth Wall; iStock)
    Fifth Wall launches third SPAC to raise $250M
    Fifth Wall launches third SPAC to raise $250M
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...