NEW YORK (AFP) – WeWork announced on Friday it plans to enter public markets through a merger transaction that raises USD1.3 billion, valuing the office-sharing firm at a fraction of the sum discussed in its unsuccessful pre-pandemic effort to go public.
The move comes two years after the former high-flying office-sharing company went into a spectacular tailspin that led to the cancelling of a planned public share offering and a bailout by Japanese investment firm SoftBank.
But with changed leadership, WeWork said its “flexible space” model positions the company for the needs of the post-pandemic working world after exiting underperforming locations and cutting thousands of jobs compared with its earlier incarnation.
WeWork said it aims for the deal to be closed by the third quarter, according to a securities filing.
“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,” said SoftBank Chief Executive Officer and WeWork Executive Chairman of Marcelo Claure.
“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.”
The transaction with BowX Acquisition Corp is the latest instance in which a prominent company eschews a traditional initial public offering in favour of combining with an entity like BowX that has been specifically established by investors for such a merger.
The move of merging with a so-called “special purpose acquisition company (SPAC)”, follows a recent trend that streamlines the process of a public listing.
WeWork was given an enterprise value of USD9 billion in the transaction.