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WeWork Agrees to SPAC Deal That Would Take Startup Public

Is this the start of a long-awaited comeback?
(Matt Rakowski)
(Matt Rakowski)
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WeWork is going public through a merger with a special-purpose acquisition company, WSJ reports.

The Details: WeWork plans to merge with BowX Acquisition Corp. in a deal valued at around $9 billion including debt. The newly formed entity plans to raise $1.3 billion in the deal, including $800 million “in what is called a private investment in public equity, or PIPE, from Insight Partners, funds managed by Starwood Capital Group, Fidelity Management and others.”

Why It Matters: “The company is taking advantage of a torrent of new SPACs to accomplish what it failed to pull off in 2019, when public investors rejected the money-losing company and its visionary yet erratic leader, Adam Neumann, who subsequently resigned as chairman and CEO. Further hit by the coronavirus pandemic, which has emptied offices throughout the country, WeWork has closed locations, renegotiated leases and cut thousands of jobs in a bid to slash expenses.”

  • It’s a steep drop from WeWork’s reported $47 billion valuation in 2019.

2021 SPAC Stats (per SPACInsider):

  1. IPO Count: 296
  2. Gross Proceeds: $96.58 Billion
  3. Average Size: $326.3 Million

Behind BowX: “The SPAC raised $420 million last year as an empty shell and then set out to find a business to combine with, as the vehicles do. Its shares rose 3.7% to $10.10 in premarket trading following announcement of the deal.”

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