Trendy office provider We Work joins Spac craze sweeping Wall Street as it attempts to float for second time
Trendy office provider We Work has joined the Spac craze sweeping Wall Street as it attempts to float on the stock market for a second time.
The firm yesterday said it plans to merge with BowX Acquisition, a so-called special-purpose acquisition company, in a deal valuing it at £6.5billion.
Through the reverse takeover, We Work, owned by Japan’s Softbank, will gain a stock market listing. We Work botched its previous attempt to float in 2019 with a value of £34billion.
Right direction?: We Work said it plans to merge with BowX Acquisition, a so-called special-purpose acquisition company
That deal was called off following a string of controversies involving co-founder Adam Neumann, including concerns about his tight grip on the company and allegations he had used drugs in the workplace.
He was later ousted as chief executive and chairman and Softbank took control of the business. Since then, We Work has slashed costs and reduced its workforce as its owner seeks to get a return on its investment.
Sandeep Mathrani, who took over after Neumann’s ousting, said: ‘We Work has spent the past year transforming the business and refocusing its core.’
We Work leases buildings and divides them into office spaces which are then sublet to its members, including small businesses, start-ups and freelancers who want to avoid paying for their own floors or buildings.
Neumann co-founded the company in 2010 and it became known early on for its exorbitant expenses, including a lavish festival for staff and members and beer provided on tap in its offices during evenings.
But since Neumann’s removal, the workforce has been slashed by 67 per cent and We Work has focused on getting members to commit for longer deals. It has been forced to close some offices as take-up fell during the pandemic but yesterday analysts were positive about its prospects.
Alex Snyder, assistant portfolio manager for real estate securities at CenterSquare Investment Management, added: ‘They’re in a great position to really succeed from here. This is a different company.’