NEW YORK– (Realty News Report) – WeWork, the co-working flex space provider has agreed to merge with BowX Acquisition Corp., a special purpose acquisition company, or SPAC.
This will result in WeWork becoming a publicly traded company. The transaction values WeWork at an initial enterprise value of approximately $9 billion. The transaction will provide WeWork with approximately $1.3 billion of cash which will enable the company to fund its growth plans into the future.
WeWork attempted to go public a couple of years ago, but that fell through.
After Covid hit, WeWork scaled back rapidly as the office market declined. WeWork closed a number of its facilities and laid off employees.
WeWork in Houston
WeWork currently has three locations in Houston: the Jones on Main building at 708 Main; the 609 Main in downtown and at the 1725 Hughes Landing Boulevard in The Woodlands, according to the WeWork website. An affiliate of WeWork investors also controls a prime high-rise development site near the intersection of Red River Street and Cesar Chavez in downtown Austin.
As of December 2020, the company successfully exited 106 pre-open or underperforming locations and executed over 100 lease amendments for rent reductions, deferrals, or tenant improvement allowances resulting in an estimated $4.0 billion reduction in future lease payments. After its strategic asset exits, WeWork retains an unmatched scale and value proposition worldwide with 851 locations in 152 cities, totaling more than one million workstations.
“WeWork has spent the past year transforming the business and refocusing its core, while simultaneously managing and innovating through a historic downturn,” saidSandeep Mathrani, CEO of WeWork, said. “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.”
Vivek Ranadivé, Chairman and Co-CEO of BowX Acquisition Corp., said, “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.”
Shaquille O’Neal in the Play
Ranadivé is the owner of the NBA’s Sacramento Kings. Former NBA star Shaquille O’Neal is an advisor to BowX.
The WeWork transaction will be funded with BowX’s $483 million of cash in trust in addition to a fully committed $800 million private placement investment at $10.00 per share led by leading investors including Insight Partners, funds managed by Starwood Capital Group, Fidelity Management & Research Company LLC, Centaurus Capital, and funds and accounts managed by BlackRock.
Marcelo Claure, Executive Chairman of WeWork, said, “SoftBank has always seen the potential in WeWork’s core business to disrupt the commercial real estate industry and reimagine the workplace. Today, we take another step towards making that vision a reality. The pandemic has fundamentally changed the way we work, and WeWork is incredibly well positioned to springboard into a future propelled by digital technology and a new appreciation of the value of flexible workspace. We look forward to having BowX as our partner as we look to the next chapter.”
Barry Sternlicht: “Commercial real estate industry experienced a seismic shift”
Barry Sternlicht, Chairman and CEO of Starwood Capital Group said, “The commercial real estate industry has experienced a seismic shift and the future of work is now being redefined in real time. WeWork is the leader in flexible space, with a globally recognized brand.”
Deven Parekh, Managing Director at Insight Partners, said, “With COVID accelerating the adoption of flexible workspace around the globe, WeWork is uniquely positioned to meet rising demand in a dynamic market. As leaders in growth investing across technology and software, we are excited to bring our decades of experience to further accelerate WeWork’s expanding digital platform.”
March 26, 2021 Realty News Report Copyright 2021
File: WeWork Merging with SPAC to Become Publicly Traded
File: (2) WeWork Merging with SPAC called BowX. Starwood Capital. Vivek Ranadivé