Workspace provider WeWork to merge with BowX Acquisition in $9bn deal

WeWork SPAC merger : New York-based office space and workspace solutions provider WeWork has agreed to merge with BowX Acquisition, a special purpose acquisition company (SPAC), in a deal that values the former at around $9 billion.

The merger will enable WeWork to become a publicly listed company, while getting nearly $1.3 billion of cash to help it fund its growth plans into the future.

WeWork offers flexible shared workspaces for tech startups and services for other enterprises. These include standard office with move-in ready office space, office suite to accommodate larger teams, and full floor office with a private floor for own branding.

The commercial real estate company has 851 locations across 152 cities across the world, totaling over a million workstations.

WeWork has a total sales pipeline of $4.0 billion and an estimated $1.5 billion in committed revenue for 2021.

WeWork SPAC merger : Workspace provider to merge with BowX Acquisition in $9bn deal. Photo courtesy of WeWork Companies Inc.

WeWork CEO comments on the WeWork SPAC merger

Sandeep Mathrani – CEO of WeWork, commenting on WeWork SPAC merger, said: “WeWork has spent the past year transforming the business and refocusing its core, while simultaneously managing and innovating through a historic downturn. As a result, WeWork has emerged as the global leader in flexible space with a value proposition that is stronger than ever. Having Vivek and the BowX team will be invaluable to WeWork as we continue to define the future of work.”

The deal will be funded with the $483 million of cash in trust of BowX Acquisition apart from a $800 million private placement investment (PIPE) at $10 per share. The PIPE investors include Insight Partners, Fidelity Management & Research Company, funds managed by Starwood Capital Group, funds and accounts managed by BlackRock, and Centaurus Capital.

Commenting on WeWork SPAC merger, Vivek Ranadivé – Chairman and Co-CEO of BowX Acquisition, 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.

“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.”

The WeWork SPAC merger is subject to BowX Acquisition’s shareholders’ approval, and other customary closing conditions, is expected to close by Q3 2021.