Business

WeWork reportedly cuts deal to go public with SPAC

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WeWork has reportedly agreed to a merger with a newly formed company — and is back on track to go public.

The office-sharing giant, which had spectacularly failed nearly two years ago and botched a previous effort to go public, agreed to merge with BowX Acquisition Corp. — a so-called special purpose acquisition company, SPAC — in a deal that values the company at $9 billion, according to The Wall Street Journal, which cited anonymous sources familiar with the transaction.

The deal also calls for New York-based WeWork to raise $1.3 billion in a private investment from Insight Partners and funds managed by Starwood Capital Group, Fidelity Management and others, according to the outlet.

It’s a dramatic reversal for the seemingly doomed office space provider, whose former chief executive and founder Adam Neumann was pushed out by its backer SoftBank in 2019 after public disclosures shed light on his controversial management style and business model.

At the time, WeWork was set to go public at a sky-high $47 billion valuation, but the storm of negative news about the company spooked investors. 

The COVID-19 pandemic has forced WeWork to close many of its office spaces.
The COVID-19 pandemic has forced WeWork to close many of its office spaces.
Alexi Rosenfeld/Getty Images

SoftBank, which holds a majority stake, was forced to rescue WeWork.

The company’s previous IPO plans and the documents it filed put it on the hot seat in the first place.

The filings revealed growing losses, no plan to turn a profit and numerous examples of Neumann’s self-dealing, including his hiring of family members for top positions and a deal in which he got WeWork to pay him $5.9 million for the trademark rights to the WeWork name.

The Israeli-born entrepreneur, it was revealed, also smoked pot on a corporate airplane, causing the jet owner to recall the plane.

Earlier this year, WeWork acknowledged that it was exploring options to go public, including with a SPAC.

“Over the past year, WeWork has remained focused on executing our plans for achieving profitability,” the company said in a statement in January. “Our significant progress combined with the increased market demand for flexible space, shows positive signs for our business.”

The pandemic has forced WeWork to close many of its office spaces and to exit leases as people worked from home.

Last year, Bow raised $420 million as an empty shell and began casting for potential companies to acquire.

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Janice Hill

Janice is a Co-Founder of NetDebaito Official & a family member of Brit Media 360. Our News HUB aiming to bring relevant and unaltered news to the general public with a specific viewpoint for each story catered. Every project is a proficient journalisms' who holds a reputable portfolio with proficiency in content analysis and research.

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