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Home U.S WeWork is finally going public through a SPAC

WeWork is finally going public through a SPAC

WeWork announced Friday morning that is merging with BowX Acquisition, a blank check firm known as a SPAC, in a deal that values the office sharing company at $9 billion. Shares of BowX were up more than 10% in early trading.

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

WeWork will be receiving 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 the SPAC.

A big chunk of that — $800 million — will come from an A-list group of investors that includes venture capital firm Insight Partners, real estate leader Starwood Capital Group, and investing giants Fidelity and BlackRock (BLK). (Insight’s Deven Parekh is also joining the board.)

WeWork added that its business has held up reasonably well during the past year, even though many companies haven’t been using office space as more employees work from home during the Covid-19 pandemic.

The company also said it had exited more than 100 underperforming locations as of December 2020. Large businesses now account for about half of its customers, up significantly from 10% in 2015. WeWork has also shifted more of its members to longer-term leases as opposed to monthly commitments.

WeWork’s 2020 sales, excluding China, were flat compared to 2019 at $3.2 billion. (WeWork sold a majority stake in its China business 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 real estate veteran who joined the company a year ago, will remain CEO and SoftBank’s Marcelo Claure will stay on as executive chairman.

“WeWork has spent the past year transforming the business and refocusing its core, while simultaneously managing and innovating through a historic downturn,” Mathrani said in the release. “As a result, WeWork has emerged as the global leader in flexible space with a value proposition that is stronger than ever.”

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

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

Richard Branson’s Virgin Galactic (SPCE), Bill Gates-backed electric vehicle battery maker QuantumScape and sports betting giant DraftKings have all gone public through blank check mergers.

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

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