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WeWork has reportedly agreed to merge with a SPAC in a deal that would take it public at a $9 billion valuation

  • Shared-workspace firm WeWork has agreed to go public by way of a SPAC merger.
  • It agreed to merge with the BowX Acquisition Corp. SPAC in a deal valuing it at $9 billion.
  • The deal comes two years after its failed IPO try. It was valued at $47 billion in 2019.
  • See more stories on Insider’s business page.

WeWork is merging with a special-purpose acquisition firm,

SPAC
, in a deal that values it at $9 billion together with debt, the corporate stated Friday.

The merger with the BowX Acquisition Corp. SPAC would take the Softbank-owned WeWork public, two years after the shared-workspace company’s disastrous attempt to file an initial public offering (IPO) in 2019.

The Wall Street Journal first reported the merger Friday morning, and WeWork then confirmed the deal in a press release.

SPAC is an organization created solely to merge or purchase one other enterprise and take it public, making it a less expensive, quicker different to an IPO, Insider’s Martin Daks reported.

The valuation is lower than 1 / 4 of the $47 billion valuation WeWork achieved in January 2019, which was partly due to a SoftBank funding in January 2019.

However its valuation had plummeted greater than 80% to beneath $5 billion by September 2019. The plunge mirrored rising issues in regards to the firm’s enterprise mannequin, the controversial habits of CEO Adam Neumann, and lax company governance.

The BowX Acquisition Corp. SPAC’s sponsor is Bow Capital Administration, run by Vivek Ranadivé, who additionally owns the NBA crew the Sacramento Kings. NBA legend Shaquille O’Neal is an advisor to Bow Capital Administration. The SPAC raised $420 million final 12 months.

The transaction could be funded with BowX’s $483 million of money in belief, WeWork stated, in addition to $800 million personal funding from teams together with Perception Companions, funds managed by Starwood Capital Group, Constancy Administration & Analysis Firm LLC, Centaurus Capital, and funds and accounts managed by BlackRock, WeWork stated in its press launch.

WeWork will get about $1.three billion of money from the deal, “which is able to allow the corporate to fund its progress plans into the long run,” it stated.

Ranadivé and Deven Parekh, managing director of Perception Companions, will be part of WeWork’s board, the corporate stated.

SoftBank’s WeWork bailout

After WeWork’s IPO plans fell via, SoftBank agreed to buy $three billion in inventory from traders and staff in a bailout package deal in October 2019. Neumann agreed to step down from the board.

However SoftBank walked away from the deal in April 2020. SoftBank in February of this 12 months reached a proposed settlement with WeWork and Neumann, the place it would buy around half of its original $3 billion stock purchasethe Wall Street Journal reported on the time.

Neumann stepped down as CEO in 2019 after the failed IPO, and sued SoftBank.

Underneath WeWork and SoftBank’s proposals, Neumann would leave the company’s board, too, and be paid about $480 million for a quarter of his shares in the company, the Journal reported.

Softbank owns a majority stake in WeWork.

Source: WeWork has reportedly agreed to merge with a SPAC in a deal that would take it public at a $9 billion valuation

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