“There is going to be a big shift in the return to work and we are a flex provider so we are exactly the person who would see it first because we are plug and play,” Mathrani said “Squawk Box.” “We’re seeing new activity even in New York, so we’re pretty optimistic.”
Mathrani’s comments on Friday came just after WeWork announced his intentions go public through a reverse merger BowX Acquisition Corp.., a special purpose vehicle. The deal values WeWork at $ 9 billion, including debt. It is expected to close in the third quarter.
The valuation of the company’s private market was achieved around $ 47 billion before the failed IPO in 2019. WeWork is planning a traditional IPO have been postponed as answer to weak demand, on falling rating and Governance concerns. Its co-founder and then CEO, Adam Neumann, was pushed out this year.
Have SPACs boomed in popularity last yearand offers private companies an alternative way of reaching the public markets. SPACs are sometimes referred to as blank check companies and raise capital through an IPO that is later used to merge with a private company to take it public.
The amount of money SPACs raised in 2021 has already exceeded all of 2020 as the wave of blank check companies began to rise. However, there have been signs that investors are excited about SPACs has subsided recently.
A man enters the doors of the WeWork collaborative workspace in Washington, DC.
Almond Ngan | AFP | Getty Images
Mathrani, former CEO of Brookfield Properties’ retail group, said the timing of the WeWork deal made sense as the pandemic disrupted the commercial real estate market as companies were forced to work remotely.
Some companies like Jack Dorsey‘s Twitter and place, have said Employees can work remotely permanently after the pandemic. Other companies expect hybrid agreements in the future that allow employees to work flexibly on some days in the office and on some days remotely.
This is important to WeWork, said Vivek Ranadive, chairman and co-CEO of BowX Acquisition Corp. Ranadive also owns the NBA’s Sacramento Kings and founder of Tibco Software in Silicon Valley.
“Companies have now decided that Flex Space is a must. They may want to own this space for their own headquarters, but they want to give it to a WeWork for everything else,” he said “Squawk Box” appears next to Mathrani. “Covid was actually a tailwind for Flex Space,” added Ranadive.
WeWork had 859 locations in 151 cities worldwide as of November. according to his website.
Mathrani, the became CEO in February According to WeWork, the utilization of its locations is increasing again in 2020, especially recently. “We’re seeing green shoots today. We’ve had 33 double-digit markets in the last 60 days around the world, from Asia to America,” he said.
Under the contract with BowX, WeWork will receive approximately $ 1.3 billion in cash, including $ 800 million in a PIPE or private investment in public equity. Mathrani said the PIPE is bigger than WeWork originally expected, which shows institutional investors’ belief in a comeback.
“I think people are betting that you are effectively getting a pre-vaccination business for a post-vaccination business. They are seeing a huge rebound in the flexibility business,” he said.