WeWork and BowX Acquisition Corp., a special purpose acquisition company (SPAC), have entered into a definitive merger agreement that will result in WeWork becoming a publicly listed 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.
The transaction will be funded with BowX’s $483 million of cash in trust (assuming no redemptions from the trust account by public investors of BowX) 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.
Upon closing, it is expected that the company will have approximately $1.9 billion of cash on the balance sheet and total liquidity of $2.4 billion (assuming no redemptions from the trust account by public investors of BowX), including a $550 million senior secured notes facility to be provided by SoftBank Group.
The transaction, which has been unanimously approved by the Boards of Directors of WeWork and BowX, is expected to close by the third quarter of 2021, subject to receipt of BowX stockholder approval, and the satisfaction of other customary closing conditions.
“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,” said Sandeep Mathrani, CEO of WeWork.
“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,” said Vivek Ranadivé, Chairman and Co-CEO of BowX Acquisition Corp.
“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,” said Barry Sternlicht, Chairman and CEO of Starwood Capital Group.
Marcelo Claure and Sandeep Mathrani will continue to lead WeWork as Executive Chairman and Chief Executive Officer, respectively, along with the rest of the company’s highly experienced leadership team. Following the closing, Vivek Ranadivé of BowX and Deven Parekh of Insight Partners will join the company’s Board of Directors.