WeWork Planning Public Offering With BowX SPAC Merger

Shared office space firm WeWork is in merger talks with the special purpose acquisition company (SPAC) BowX Acquisition Corp. in a move to go public.

“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,” Sandeep Mathrani, CEO of WeWork, said in a press release on Saturday (March 26). 

The SPAC deal gives WeWork a $9 billion valuation, including debt. The Silicon Valley startup would also raise $1.3 billion, including $800 million in private investment in public equity, or PIPE. Those PIPE funds would come from Insight Partners, with capital managed by Starwood Capital Group, Fidelity Management and others. Upon closing, WeWork is anticipated to have about $1.9 billion in cash on its balance sheet and total liquidity of $2.4 billion, including a $550 million senior secured notes facility from SoftBank Group.

BowX is run by Vivek Ranadivé, owner of the NBA’s Sacramento Kings and founder of Tibco Software Inc. Basketball phenom Shaquille O’Neal is an adviser.

Vivek Ranadivé, chairman and co-CEO of BowX, said WeWork “is primed” for short-term profitability and sees plenty of potential for “long-term growth and innovation,” which makes the startup “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,” Ranadivé added.

WeWork has expansion plans in place to move beyond its core business through its On Demand, All Access and Platform offerings, according to the press release. Users can access WeWork via mobile app and choose when, where and how they work. The company said there is high demand for its services from both landlords and members, with a $4 billion sales pipeline and roughly $1.5 billion in committed revenue this year.

The SoftBank-backed startup attempted to go public in August of 2019 with a traditional initial public offering (IPO) and was valued at $47 billion, but its SEC filing showed the company lost billions and was irresponsibly spending money. Investor scrutiny and issues with founder and former CEO Adam Neumann, along with other pressures, resulted in the IPO being scrapped.

WeWork started looking into a SPAC merger in January. So far this year, over 80 new SPACs have debuted.