WillScot Mobile Mini to acquire McGrath RentCorp for $3.8bn in strategic expansion

WillScot Mobile Mini Holdings Corp., a leader in innovative temporary space solutions, has entered into a definitive agreement to acquire McGrath RentCorp, a top business-to-business rental company. This acquisition, valued at an enterprise value of $3.8 billion, is a strategic move to enhance WillScot Mobile Mini’s position in the North American market for turnkey space solutions.

The deal, unanimously approved by the Board of Directors of both companies, is structured as an all-cash tender offer for all outstanding shares of McGrath. McGrath shareholders will receive $123.00 in cash or 2.8211 shares of WillScot Mobile Mini common stock per share. The transaction represents a 10.1% premium over McGrath’s closing stock price as of January 26, 2024.

Strategic and Financial Benefits:

• The merger brings together two businesses with diversified customer segments, enhancing the combined company’s offering and predictable cash flow profile.
• WillScot Mobile Mini anticipates $50 million in operating synergies within 24 months, bolstered by its history of successful integrations.
• The expanded customer base and rental fleet provide a platform for rolling out strategic growth levers, driving sustained growth and margin expansion.
• The merger strengthens the financial profile, enhancing cash generation and reinvestment capabilities for continued growth.

Brad Soultz, CEO of WillScot Mobile Mini, expressed excitement about the growth prospects and shareholder benefits. Joseph Hanna, President and CEO of McGrath, highlighted the transaction’s validation of their business and the opportunities it presents for customers, employees, and shareholders.

WillScot Mobile Mini has secured a $1.75 billion senior secured bridge credit facility and plans to upsize its existing ABL Facility to fund the transaction. McGrath shareholders will hold a 12.6% stake in the combined entity, participating in the significant value creation opportunity.

Subject to McGrath shareholder approval, regulatory clearances, and customary closing conditions, the transaction is slated for completion in the second quarter of 2024.

The acquisition of McGrath RentCorp by WillScot Mobile Mini represents a strategic alignment and consolidation in the rental solutions market. This merger not only enhances the combined company’s market presence but also signals a trend of significant mergers and acquisitions in the industry, driven by the pursuit of synergies and expanded market reach.