WeWork (WE) has reached an agreement to acquire Texas-based flexible workspace provider Common Desk. The transaction is still subject to customary closing conditions and is expected to close in March. WE shares rose 2.26% to close at $8.16 on January 25.
Founded in 2010, WeWork creates remote environments that allow people and companies to work together. It is one of the leading flexible space providers. WeWork’s upcoming earnings report for Fiscal Q1 2022 is scheduled for May 19, 2022.
Once the transaction closes, Common Desk will become a WeWork company but will still operate as ‘Common Desk.’ The acquisition underscores WeWork’s cost-efficient strategic growth plan. It is also expected to strengthen its footprint in the flexible workspace market, with Common Desk already serving 4,000 customers.
WeWork expects the transaction to strengthen its value proposition, while Common Desk is banking on the merger to improve the experience of its members. It plans to leverage WeWork’s client roster to strengthen its member base.
Common Desk will join WeWork, having established itself as a premier flex-space provider. The two intend to work together by creating meaningful communities through member-focused hospitality. The acquisition should also allow both brands to expand their operations to new markets.
Consensus among analysts is a Moderate Buy based on 1 Buy recommendation from Deutsche Bank analyst Andreas Neubauer.
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