WeWork is set to go public via a merger with BowX Acquisition Corp in a special purpose acquisition (SPAC) deal, at a valuation of $9 billion.

Blank-check firm BowX raised $420 million in its initial public offering (IPO) in August 2020.
WeWork is set to receive around $1.3 billion in cash from the merger.

Investors in the round included Insight Partners, funds managed by Starwood Capital Group, Fidelity, Centaurus Capital, and funds and accounts managed by BlackRock.

The office sharing company lost $3.2 billion in 2020, but expects earnings before interest, taxes, depreciation, and amortization of $485 million next year, according to its latest annual report.

Occupancy of its spaces was just 47 per cent at the end of last year as the pandemic restrictions kept many of its co-working spaces closed globally, but WeWork expects increased demand as restrictions loosen.

WeWork said it exited all its non-core ventures and has streamlined its headcount by 67 per cent from its peak in September 2019.

As of December 2020, the company also said it has exited 106 pre-open or underperforming locations.

The valuation is a significant fall from the $47 billion it was worth ahead of its planned 2019 IPO, which later fell apart due to concerns about chief executive Adam Neuman’s management style.
Early investor SoftBank, a Japanese conglomerate who also owns large stakes in Uber via its Vision Fund, will retain a majority stake.

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

He added: “Having Vivek and the BowX team will be invaluable to WeWork as we continue to define the future of work.”

Vivek Ranadivé, Chairman and Co-chief executive of BowX Acquisition Corp, said: “I’m thrilled to partner with Sandeep, Marcelo and the entire WeWork team as they continue to transform this business and the real estate industry at large.”

“This company is primed to achieve profitability in the short-term, but the added long-term opportunity for growth and innovation is what made WeWork a perfect fit for BowX.”

He added: “With a fantastic core business, I see WeWork as a company at an inflection point, with an incredible roster of key members coupled with the vision and leadership to digitize an enormous industry.”

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