WeWork in talks to sell business it bought just 8 months ago

WeWork is cutting thousands of jobs as it tries to generate positive cash flow by 2023. PHOTO: REUTERS

SAN FRANCISCO (BLOOMBERG) -- WeWork is in talks to sell Managed by Q Inc, a business it owned for about eight months, according to people familiar with the matter. The deal may help the troubled co-working company raise cash and refocus on its main business.

A group of investors and executives, including Managed by Q co-founder and former chairman Dan Teran, is trying to buy the business back from WeWork, the people said. Discussions are progressing and WeWork is actively pursuing a resolution, said the people.

WeWork bought or backed several start-ups in recent years during a growth binge. That expansionary effort contributed to its billions of dollars in losses, and after an aborted initial public offering earlier this year, some of those deals may be unwound.

WeWork has turned to major investor SoftBank Group for a rescue package to keep it going, part of which will see the company ditch side businesses and focus on making its core operations sustainable.

The company is also cutting thousands of jobs as it tries to generate positive cash flow by 2023.

Earlier this year, WeWork acquired Managed by Q - which offers technology to help companies manage workplace tasks and services - with the goal of combining the smaller outfit's expertise with its own global scale to "deliver an unprecedented and seamless office experience for growing companies everywhere".

Teran spoke on a panel at the SALT conference in Abu Dhabi on Wednesday and moderator Omeed Malik, CEO of merchant bank Farvahar Partners, asked about Teran's plans.

"I'm actively working to buy back my company," he said during a live stream from the conference. After selling for a reported US$220 million (S$299 million), Teran said he thought he was done raising capital for Managed by Q. "And here I am six months later doing it again," he added.

The value of the deal under discussion could not be ascertained. Managed by Q was valued at US$249 million in a financing round in January, according to a TechCrunch report that cited PitchBook data.

Join ST's Telegram channel here and get the latest breaking news delivered to you.