WeWork has now entered into an agreement with the BowX Acquisition Corp. blank check company, led by Indian Vivek Ranadive, to provide for an industry mix that will result in the shared workplace company becoming public registered company.
The deal puts WeWork at an initial venture value of about $ 9 billion, WeWork said Friday.
The move comes after WeWork’s attempt to go public in 2019 and a sharp drop in its valuation.
Following the effort, Japanese-based technology investor SoftBank took 80 percent ownership of the company and invested $ 5 billion in new funding.
The new business is expected to close by the third quarter of 2021, subject to obtaining BowX owner’s permission, and satisfying other normal closing conditions.
The deal will provide WeWork with approximately $ 1.3 billion in cash that will allow the company to fund its future growth plans.
“This company (WeWork) is prioritized for short-term profitability, but it is the additional long-term opportunity for growth and innovation that makes WeWork well-suited for BowX,” Vivek Ranadive, Chairman and Co-CEO of BowX Acquisition, said in a statement.
Following the closure, Vivek Ranadive of BowX and Deven Parekh of Insight Partners will join the company ‘s Board of Directors.
“SoftBank has always seen the potential in WeWork’s core business of disrupting the commercial real estate industry and reshaping the workplace. Today, we take another step towards that vision. to achieve that, “said Marcelo Claure, CEO of SoftBank and Executive Chairman of WeWork.
“The pandemic has fundamentally changed the way we work, and WeWork is ideally placed to move into a future driven by digital technology and a new understanding of the value of place- flexible working. We look forward to having BowX as our companions as we watch the next chapter. “
Since 2019, WeWork has made significant progress in transforming its business through a strategic plan that included robust cost control efforts, non-core business exit, and product package optimization, contributed to a significantly improved cost structure.
Over the course of 2020, WeWork said it will improve its free cash flow by $ 1.6 billion through cost-cutting measures including reducing SG&A costs by $ 1.1 billion and trimming building operating costs by $ 400 million.
The company also abandoned its non-core ventures and made a sharp turnover with 67 percent from the September 2019 high.
The company’s 2020 revenue, excluding China, was $ 3.2 billion, which is flat compared to 2019, even after leaving non-core businesses and despite major headlines from Covid- 19.
Going forward, WeWork plans to expand beyond its core business through the On Demand, All Access, and Platform offerings, allowing users to choose from their WeWork mobile app when, where, and how they work.
“WeWork has in the past year transformed the industry and renewed its core, while at the same time managing and innovating through a historic recession,” said Sandeep Mathrani, CEO WeWork, in a statement.
“As a result, WeWork has emerged as a global leader in a flexible space with a value proposition that is stronger than ever. Vivek and the BowX team will be invaluable to WeWork as we continue to explain the future of the work. “
Claure and Mathrani will continue to lead WeWork as Executive Chairman and Chief Executive Officer, respectively.
–IANS
gb / in
(Only the headline and image of this report may have been reworked by Industry Status staff; the rest of the content is automatically generated from syndicated feeds.)