WeWork Inc. is making its first acquisition as a public company — and the first since current CEO Sandeep Mathrani took over from the company’s embattled co-founder, Adam Neumann.
WeWork, headquartered in New York, has agreed to acquire Common Desk, a coworking startup with 23 locations in Texas and North Carolina. Common Desk will continue to exist as a separate brand. The majority of Common Desk’s locations — 19 out of 23 — are managed by management agreements, a common hotel industry arrangement that allows the company to run a space and collect a share of rent revenue without entering into a longer-term traditional lease. WeWork stated that it intends to pursue additional management agreements in the future.
The acquisition is directly related to WeWork’s core business, which contrasts with some of WeWork’s Neumann-era acquisitions, in which the company purchased startups with more amorphous business models, such as an online coding school and Meetup.com. Many of those acquisitions were sold off after Neumann left the company in 2019 amid a failed IPO attempt.
WeWork returned to the public markets last year, this time through a merger with a special-purpose acquisition company. WeWork’s stock has dropped about 20% since its initial public offering in October, giving the company a market capitalization of $5.7 billion.
WeWork and Common Desk both declined to disclose the transaction’s price.
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