Yardi Becomes Majority Owner of WeWork in Bankruptcy Agreement

Yardi has become the majority owner of WeWork after a bankruptcy agreement was reached.

This significant shift in ownership was made possible through a deal that allowed Yardi to acquire a majority stake in WeWork.

The agreement was finalized as part of WeWork's bankruptcy proceedings, which were triggered by the COVID-19 pandemic and subsequent economic downturn.

WeWork's financial struggles led to a significant decline in its valuation, making it an attractive acquisition target for Yardi.

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Yardi Systems has taken a 60% equity stake in WeWork.

The deal needs approval from WeWork's creditors, according to Bloomberg.

Yardi Systems is providing $337 million of the new money.

A group of lenders will get a 20% stake in WeWork.

SoftBank, a longtime WeWork investor, will also get a 20% stake.

Yardi Systems has been working with WeWork for a while.

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WeWork has secured a $450 million new-money financing facility to support its Chapter 11 cases and emerge from restructuring by the end of May.

This financing facility will provide WeWork with the necessary funds to conclude its financial and operational restructuring. The company has also secured interim funding of $50 million from senior lenders to sustain operations until the bankruptcy conclusion on May 31.

The deal with Yardi Systems, which involves a 60% stake acquisition, has been approved by the bankruptcy court. Yardi Systems will contribute $337 million through its affiliate Cupar Grimmond LLC to cover the majority of WeWork's $450 million bankruptcy exit plan.

WeWork expects to eliminate all of its $4 billion of outstanding, prepetition debt obligations through its Plan. This will be a significant relief for the company, allowing it to start fresh and focus on its business operations.

The proposed financing deal also includes an additional $400 million to cover various restructuring and bankruptcy exit expenses. This will help WeWork to smoothly transition into its new ownership structure with Yardi Systems.

SoftBank's equity will be reduced to approximately 16.5% under the new plan, although it has the potential to increase to 36% if certain financial benchmarks are not met. This change in ownership structure signals a new chapter for WeWork, as the company navigates its critical juncture.

WeWork aims to operate at less than half its pre-pandemic size, with 337 locations around the world, including 178 across 38 cities in the U.S. and Canada. This will be a significant adjustment for the company, but it will also allow it to focus on its core business and adapt to the evolving demands of the future of work.