WeWork agreed to become a publicly traded company Friday following a merger with BowX Acquisition Corp. that values the office sharing space group at around $9 billion.
The deal will give WeWork around $1.3 billion in cash, funded by $483 million from BowX and another $800 million in so-called private investment in public equity, or PIPE funds including commitments from Centaurus Capital and BlackRock.
WeWork, which said it has a $4 billion total sales pipeline, with around $1.5 billion in committed revenues for this year, will be run by executive chairman Marcelo Claure and CEO Sandeep Mathrani.
"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," said BowX CEO Vivek Ranadivé. "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," he added.
BowX is an affiliate of Bow Capital, a San Francisco, California-based investment group founded by Ranadivé that includes NBA legend Shaquille O'Neal as one of its key supporters.
BowX shares were marked 5.25% higher in early trading on the Nasdaq Friday following news of the deal to change hands at $10.25 each.
Earlier this week, WeWork reportedly said it lost $3.2 billion over the whole of 2020 -- on top of the $3.5 billion in red ink spilled in 2019 -- as it attempted to woo investors ahead of its planned merge with BowX, a so-called black check investment vehicle that targets companies for acquisition and then merges them into their existing listing.
More than $96 billion has been raised by around 300 SPACs so far this year -- compared to $83.4 billion over the whole of 2020 -- with another 230 waiting in the wings to add another $58 billion to the growing total.
The IPOX SPAC index, a benchmark for performance in the blank-check market, is up more than 48.7% over the past year, but have fallen some 22.5% from its February 17 peak amid a series of under-performing SPAC debuts and growing concerns over the lack of viable targets for the now 700-plus groups that are listed.