(Yicai Global) April 16 -- Shanghai-based People Squared recently bought fellow shared office space brand Workingdom lock, stock and barrel for CNY300 million (USD47.7 million) in another big merger and acquisition case in this field.
Workingdom, also headquartered in Shanghai, will continue to maintain its brand independence in the near term, said award-winning journalist Zhao Hongmin, who reported the buyout yesterday on his own media account. People Squared and Workingdom agreed in April to jointly develop 100 office spaces within three years, he added.
The upgrade of the cooperation between the two into a full takeover may be linked to the recent wave of M&As in the sector. Most co-working firms in China run at a loss, Zhao noted. Pressure of high rents and operating costs has made M&As -- office-sharing by another means -- the best option for small outfits to avoid capital chain rupture and maximize efficiency.
People Squared, formed in 2010 as the earliest operator of shared office space in China, now has more than 30 units nationwide and ranks among the top five in the field. Workingdom, which formed in 2016, mainly provides products and services to high-end customers. The merger is expected to push their business scale into the top three in the sector.
New York-based WeWork Companies Inc., the world's largest shared office space operator, also snapped up its Chinese competitor Shanghai Naked Hub Enterprise Management Consulting Co. through its local division for USD400 million. The latter, which formed in 2015, has been among the fastest-growing operators in China over the past two years.