Merger BOWXU

WeWork goes public after all

, SPAC research

WeWork, the leading flexible space provider, and BOWX, announced today that they have entered into a definitive merger agreement, providing for a business combination that will result in WeWork becoming a publicly listed company

WeWork was founded in 2010 with the vision to create environments where people and companies come together and do their best work. Since opening their first location in New York City, they have grown into a global flexible space provider committed to delivering technology-driven flexible solutions, inspiring spaces, and unmatched community experiences. Today, they are constantly reimagining how the workplace can help everyone, from freelancers to Fortune 500s, be more motivated, productive, and connected. As of December 2020, the company successfully exited 106 pre-open or underperforming locations and executed over 100 lease amendments for rent reductions, deferrals, or tenant improvement allowances resulting in an estimated $4.0 billion reduction in future lease payments. After its strategic asset exits, WeWork retains an unmatched scale and value proposition worldwide thanks to its 851 locations in 152 cities, totaling more than one million workstations. Enterprise companies now make up more than 50% of WeWork’s memberships, up from just 10% in 2015. Only 10% of WeWork’s members have month-to-month commitments, while more than 50% have commitments longer than 12 months, contributing to an average full commitment term of well over 15 months.

The transaction will be funded with BowX’s $483mm of cash in trust (assuming no redemptions) in addition to a fully committed $800mm PIPE at $10.00 per share led by leading investors including Insight Partners, funds managed by Starwood Capital Group, Fidelity Management & Research Company LLC, Centaurus Capital, and funds and accounts managed by BlackRock On closing, the company will have approximately $1.9bn of cash on the balance sheet and total liquidity of $2.4bn (assuming no redemptions), including a $550mm senior secured notes facility to be provided by SoftBank Group

PJT Partners is acting as sole financial advisor to WeWork Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal counsel to WeWork and UBS Investment Bank is acting as sole financial and capital markets advisor to BowX

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