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WeWork Inc. is making its first acquisition as a public company — and the first since its current chief executive officer, Sandeep Mathrani, took over from the coworking company’s embattled co-founder, Adam Neumann.
New York-based WeWork agreed to buy Common Desk, a coworking startup with 23 locations in Texas and North Carolina. Common Desk will continue to operate as an independent brand. Most of Common Desk’s locations — 19 out of 23 — operate under management agreements, an arrangement common in the hotel industry that allows the company to run a space and collect a share of rent revenue, without entering into a longer-term traditional lease. WeWork said it is aiming to pursue more management agreements in the future.
The acquisition is directly related to WeWork’s core business, a feature that stands in contrast to some of WeWork’s Neumann-era acquisitions, in which the company bought startups with farther-flung 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 attempt at an initial public offering.
Last year, WeWork again made a run at the public markets, this time via a merger with a special-purpose acquisition company. WeWork’s shares are down about 20 per cent since its October listing, giving the company a market cap of US$5.7 billion.
WeWork and Common Desk declined to provide the price of the transaction.