The deal is final: D.C.-based incubator 1776 and Philly coworking chain Benjamin’s Desk have officially merged their businesses in a new company that will retain the 1776 name.
Reports of a deal between the two companies first surfaced late last month, when a Washington Business Journal report said the Philly company was in talks to acquire 1776. A source with knowledge of the deal confirmed to Technical.ly at the time that a deal was on the table, but that it was a merger, not a straight-up acquisition.
As part of the deal, former 1776 CEO Evan Burfield will become Executive Chairman, with the co-CEO duo of Anthony and Jen Maher taking their former titles in the new company. 1776’s UNION platform (which went live in Philly in the spring with Benjamin’s Desk as partner) will spinout into a separate company with Burfield at the helm.
Per BD’s Anthony Maher, no layoffs are expected in the wake of the merger, but rather more staff being brought on to help cover the “incubator system” across the northeast corridor.
Though no financial terms from the deal were made available, the Washington Post reports, citing three sources, that 1776 “struggled to stay cash-flow positive after its first year as new investments weighed heavily on its books.” The WaPo report also described the deal as a “complicated stock merger in which shareholders of both companies now hold significant ownership interests in the combined company.”
The combined network will be involved in the managing or operation of approximately 250,000 square feet of office space, including some 94,000 square feet currently operated under the 1776 brand and more than 138,000 square feet managed by Benjamin’s Desk and its licensing partners. Here’s the latest roundup of the Philly company’s locations.
Maher initially denied a merger was on the table, and said the talks were just “around how to help entrepreneurs and things like the Challenge Cup.” Last week, 1776’s Evan Burfield was on the stage alongside Jennifer Maher at the Benjamin’s Desk Challenge Cup, where he hinted again that more deals between the two would come.