Jul 08, 2020 04:57 PM

China's WeWork Equivalent Achieves Backdoor Listing on the Nasdaq

(Deal Street Asia) — Ucommune, China’s biggest shared workspace provider, has been acquired by Orisun Acquisition Corp, a Nasdaq-listed U.S. blank check firm formed for the purpose of entering into a merger, asset acquisition, or similar business combination, according to an announcement.

According to the terms of the deal, Orisun’s wholly-owned subsidiary Ucommune International will acquire Ucommune, resulting in a combined company that will have a pro forma firm value of approximately $769 million.

The merger comes as Ucommune failed to launch its initial public offering (IPO) last year after Citigroup Inc. and Credit Suisse Group reportedly walked away from underwriting it due to alleged unrealistic IPO valuation.

Ucommune claimed a valuation of $3 billion after the completion of a $200-million Series D round in November 2018 – a significant jump from its previous round three months earlier that had valued the firm at $1.8 billion. The firm was founded in 2015, with early investors including Sequoia Capital China, Matrix Partners China, Sinovation Ventures, and Zhenfund.

The terms of the agreement also showed that Ucommune International will become a listed company on the Nasdaq Capital Market following the acquisition, with Ucommune’s shareholders and management receiving 70 million ordinary shares of Ucommune International.

Additionally, Ucommune shareholders are also entitled to receive earn-out consideration of up to an additional 4 million ordinary shares of Ucommune International, subject to certain conditions.

Ucommune’s founder Daqing Mao said the firm will continue to strengthen its market position and further expand its footprint in China.

“This transaction directly aligns with our strategic objectives and will unleash the exciting potential of our new growth initiatives, including the expansion of our asset-light model,” Mao added.

The firm currently has more than 700,000 members and more than 94,000 work stations across 211 office spaces in Greater China and Singapore, with an aggregate managed area of 686,000 square meters as of December 2019.

Ucommune generated revenues of 1.17 billion yuan ($170 million) in 2019 (unaudited), and revenues grew over 160% from 2018 to 2019. The company’s management estimates revenues of 1.35 billion yuan and 2.1 billion yuan in 2021 and 2022 respectively.

Ucommune’s current management team will continue running the company after the transaction with Orisun.

This story was originally published by Deal Street Asia

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