WeWork Set to Go Public in October

WeWork, 600 B St., San Diego. Image courtesy of WeWork

Two years after its last effort to go public, WeWork Inc. seems on track for success with a new filing, via a SPAC IPO. Acting in line with the announcement of a definitive merger agreement with WeWork in March 2021, BowX Acquisition Corp. just filed its definitive proxy statement/prospectus with the SEC, revealing that the special purpose acquisition company will hold a special meeting of its stockholders to approve the proposed business combination on Oct. 19, 2021. The transaction attributes WeWork with an enterprise value of approximately $9 billion.

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According to the SEC document, the purpose of the BowX special meeting is multi-faceted, and beyond the approval and adoption of the merger agreement and business combination, it includes such tasks as electing nine directors of the new WeWork and officially altering the proposed charter with a change of BowX’s name from BowX Acquisition Corp. to WeWork Inc. Encouraging shareholders to support the merger, BowX cites several reasons for the business combination, chief among them, the expanding flex workspace sector.

“WeWork has an opportunity to grow flexible workspace market share in the multitrillion-dollar commercial real estate market,” the BowX board of directors noted in the SEC document. “As we believe the fallout from the COVID-19 pandemic continues to accelerate the shift away from traditional office space, information reviewed by the BowX board of directors suggested that flexible workspaces could potentially represent up to 22.2 percent of the U.S. office real estate market by 2030, positioning WeWork for substantial revenue growth, even assuming WeWork’s market share of the flexible workspace market share remains constant.”

The math and the aftermath

As BowX noted in the March announcement, the company plans to finance the merger with WeWork with $483 million of cash in trust, as well as an $800 million private placement investment at $10.00 per share. Upon completion of the transaction, WeWork will emerge as a public entity with a balance sheet featuring roughly $1.9 billion of cash and total liquidity of $2.4 billion.

The boards of directors of both BowX and WeWork have unanimously approved the transaction. Aside from the satisfaction of certain requisite closing conditions, the green light of BowX’s stockholders is all that stands between WeWork trading publicly on the New York Stock Exchange under the ticker symbol WE.