(Bloomberg) -- Lodging startup Sonder, which decks out apartments and hotel rooms as hip short-term rentals, has agreed to merge with blank-check company Gores Metropoulos II Inc., according to people familiar with the matter.
The agreement between Sonder and the Gores special purpose acquisition company, or SPAC, could be announced as soon as Friday, said the people, who asked not to be identified because the matter is private. The transaction would give the combined entity a pro forma enterprise value of $2.2 billion, the people said.
The transaction includes a $200 million private placement led by an affiliate of Gores Group, the investment firm founded by the SPAC’s Chief Executive Officer Alec Gores, with participation from Fidelity Management & Research Co., funds and accounts managed by BlackRock Inc., Atreides Management, entities affiliated with Moore Capital Management, Principal Global Investors and Senator Investment Group.
Representatives for Sonder and Gores declined to comment. Representatives for Atreides, BlackRock, Fidelity, Moore Capital, Principal and Senator didn’t immediately respond to requests for comment.
Last year, Sonder reached a valuation of $1.3 billion after a funding round.
The company previously raised more than $560 million and is backed by investors including Fidelity, WestCap, Inovia Capital, Valor Equity Partners, Greenoaks Capital, Greylock Partners and Spark Capital.
Gores Metropoulos II, led by CEO Gores and Chairman Dean Metropoulos, raised $450 million in a January initial public offering.
San Francisco-based Sonder first refurbishes short-term rentals and lists them on its website, as well as with Airbnb Inc. and Expedia Group Inc.’s Vrbo. Sonder, which has taken over other buildings including old hat factories and police stables, has also expanded in recent years to work with hotels.
Sonder CEO Francis Davidson began experimenting with amenities when he was managing apartments as a McGill University student in Montreal. Davidson founded Sonder in 2012 with Martin Picard, and told Bloomberg News in 2019 that the company had ambitions of raking in more revenue than Marriott by 2025.
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