WeWork, after losing $3.2 billion last year, announced today it will combine with BowX Acquisition, a SPAC that includes NBA legend Shaquille O’Neal on its advisory board.
The transaction values WeWork at an initial enterprise value of approximately $9 billion. The deal is expected to provide WeWork with approximately $1.3 billion of cash, including an $800 million PIPE with participation from Insight Partners, funds managed by Starwood Capital Group, Fidelity Management & Research Company, Centaurus Capital, and funds and accounts managed by BlackRock.
Since 2019, WeWork said it has made significant progress towards transforming its business through a strategic plan that included “robust expense management efforts, exits of non-core businesses, and material portfolio optimization, which contributed to a dramatically improved cost structure.”
WeWork said it improved its free cash flow in 2020 by $1.6 billion through cost cutting measures including reducing SG&A expenses by $1.1 billion and trimming building operating expenses by $400 million. The company also exited all of its non-core ventures and slashed its workforce by 67 percent from its peak in September 2019.
BowX Acquisition was formed by management of Bow Capital, including Vivek Ranadivé, and Murray Rode. Bow Capital is a VC fund “bridging the best of academia, business, and entertainment.” Read more.
