WeWork has agreed to merge with a dedicated acquisition company, according to people familiar with the case, in a deal that the shared office provider would make public nearly two years after its glaring failure to launch a traditional IPO.
The planned merger with the BowX Acquisition Corp. SPAC would value WeWork at $ 9 billion including debt, the people said. WeWork would also raise $ 1.3 billion, including $ 800 million in a so-called private public equity investment, or PIPE, from Insight Partners, funds managed by Starwood Capital Group, Fidelity Management and others, the people said.
In January, The Wall Street Journal reported that WeWork was in talks to combine with BowX.
WeWork is a major player in the flexible office space market. It signs long-term leases with landlords and then, after renovating and furnishing a space, rents out small offices or even entire buildings to tenants for just a month at a time. Had the merger completed as expected in the coming months, it would have been a long and bumpy road to listing for WeWork.
The company is taking advantage of a deluge of new SPACs to achieve what it failed in 2019, when public investors rejected the money-losing company and its visionary but erratic leader, Adam Neumann, who subsequently stepped down as chairman and CEO. Further hit by the coronavirus pandemic, which has emptied offices across the country, WeWork has closed locations, renegotiated leases and cut thousands of jobs to cut costs.