WeWork is finally going public, after the flexible office space company announced Friday a merger with special-purpose acquisition company BowX Acquisition Corp. in a deal valuing WeWork at $9 billion.
Under terms of the deal, WeWork will receive about $1.3 billion, including $800 million in a so-called PIPE (private investment in public equity) with investors including Insight Partners, funds managed by Starwood Capital, Fidelity Management & Research Co., Centaurus Capital and funds managed by BlackRock.
The Wall Street Journal reported earlier Friday that a deal had been reached, after reporting in January that the companies were in talks.
Shares of BowX , which went public in October, rose 3.2% in premarket trading. It has lost 5.1% year to date through Thursday, while the S&P 500 index SPX has gained 4.1%.
The deal comes nearly two years after WeWork officially postponed plans for a more traditional initial public offering, amid large losses, a heavy debt load and concerns surrounding Chief Executive Adam Neumann that eventually led to his ouster.
The valuation from the deal with BowX compares with a $47 billion valuation WeWork had in the run-up to its plans for an IPO in 2019.
Chief Executive Sandeep Mathrani said WeWork has changed since those days, through a strategic plan to cut expenses, optimize its portfolio and exit non-core businesses.
Source: MarketWatch