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April 30 (Reuters) – Lodging startup Sonder Holdings Inc said on Friday it has agreed to go public through a merger with a blank-check firm backed by billionaire investors Alec Gores and Dean Metropoulos, in a deal valuing the combined company at around $2.2 billion.
The deal with Gores Metropoulos II will be financed with a private placement of $200 million from investors including Fidelity Management & Research Company LLC, funds and accounts managed by BlackRock Inc and Senator Investment Group. Cash proceeds are expected to be about $650 million.
San Francisco-based Sonder leases buildings, refurbishes them and lists them on its website. The company was launched in 2014 and is led by co-founder Francis Davidson, who conceptualized the idea while managing a few apartments for short-term stays as a university student in Montreal.
Gores Metropoulos II, a special purpose acquisition company (SPAC) raised $450 million through an initial public offering in January.
A former SPAC by Gores and Metropoulos took lidar sensor maker Luminar Technologies Inc public through a nearly $2.9 billion merger in August last year.
SPACs are shell companies that raise funds to take a private company public through a merger at a later date, allowing such private companies to sidestep the hassles and scrutiny associated with a traditional IPO.
Goldman Sachs is acting as the financial advisor to Sonder, while Morgan Stanley is the lead financial advisor to Gores Metropoulos. (Reporting by Sohini Podder in Bengaluru; Editing by Ramakrishnan M.)
