Gen Z brand Selina going public in SPAC merger

Co-work, global nomad-driven hospitality brand Selina will launch an IPO by entering a SPAC (special purpose acquisition company) merger agreement with BOA Acquisition Corp., which will value the 134-property company at US$1.2 billion.

Cash proceeds of US$285 million from the deal with BOA include US$70 million in private investment in public equity from investment firms that include South Light Capital, MORE Investment House and venture capitalist Sir Ronald Cohen, which includes a US$15 million minimum equity backstop from BOA’s sponsor. Of the total, US$10 million will be an advanced PIPE funded concurrent with the announcement, strengthening Selina’s balance sheet as it rolls out new sites. There is approximately US$230 million currently held in BOA’s trust account. Subject to any redemptions by BOA stockholders, existing Selina shareholders will retain approximately 71% ownership in the combined company.

The deal is expected to close in the first half of 2022, creating Selina Hospitality Plc, which will trade on the New York Stock Exchange under the symbol “SLNA.”

Co-work space at the recently opened Selina in Chicago

Selina was founded in 2014 by Daniel Rudasevski and Rafael Museri, first in Central America and today across North and South America, Europe and the Middle East. Today, 83 properties are open with the remainder under development.

In an investor call on Thursday, Museri said Selina had secured US$350 million of committed capital to expand in 12 locations (including Mexico, Germany, the UK, and Australia) and add approximately 40,000 new beds by 2025. Selina expects to be EBITDA positive by the first quarter of 2023 and generate approximately US$1.2 billion in revenue by 2025, driven by new openings, operational improvements and the maturation of its portfolio.

According to the company’s estimates, remote workers and frequent flyers spend approximately US$350 billion a year on travel. In addition, 73% of employers are projected to utilize remote work capabilities by 2028.

Selina works with real estate owners of underperforming hotels to transform them into cultural hubs through partnerships with local artisans, designers, and F&B providers. The owners pay about 90% of the transformation costs.