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Starwood Capital interested in acquiring IWG

Co-working company’s public valuation pales in comparison to WeWork

Barry Sternlicht (Credit: John Lamparski/Getty Images)

Barry Sternlicht’s Starwood Capital, TDR Capital, and Lone Star have recently engaged IWG with interest in acquiring the company, according to WSJ. Shares in the office sharing company increased 32 percent on the news.  

Power of History: IWG was the office darling of the dot-com era. The company’s IPO valued it at almost four times projected revenues. When the downturn came, tenants dried up and the company had no way to pay for its ‘debt-like’ leases. It filed for Chapter 11 bankruptcy protection in the US and retained its U.K. stock-market listing.

WeWork’s Absurd Valuation: IWG has a market cap of $2.76 billion. Although WeWork generated 70 percent less revenue than IWG in 2017, it’s valued at $20 billion valuation. Tough to understand. 

Quotable: WeWork’s Adam Neumann even admits, “Our valuation and size today are much more based on our energy and spirituality than it is on a multiple of revenue.” Smooth salesman, tough pitch.

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