Williams Scotsman to acquire ModSpace for approx. $1.1B
WillScot Corporation (WSC) announced that it has entered into a definitive agreement to acquire Modular Space Holdings, the parent holding company of Modular Space Corporation, for an enterprise value of approximately $1.1B. Williams Scotsman will indirectly acquire MS Holdings for a purchase price comprising $1,063,750,000 of cash consideration, 6,458,500 shares of WSC Class A common stock and warrants to purchase 10,000,000 shares of WSC Class A common stock at an exercise price of $15.50 per share, subject to customary adjustments.
The transaction, which is subject to customary closing conditions, is expected to close in 3Q18.
ModSpace, a privately-owned provider of office trailers, portable storage units and modular buildings, had approximately $1.1B of total assets as of March 31, 2018.
ModSpace generated $453M of total revenue, $18M of net income and $106M of Adjusted EBITDA for the twelve months ended March 31, 2018. Once combined, Williams Scotsman will have over 160,000 modular space and portable storage units serving a diverse customer base from approximately 120 locations across the United States, Canada and Mexico.
Williams Scotsman expects to capture $60M in annual cost synergies after integration, with approximately 80% of the forecast synergies expected to be realized on a full run-rate basis by the end of 2019.
Williams Scotsman also expects to benefit from the net operating tax loss carryforwards to be acquired in the transaction, and for the transaction to be accretive to earnings in 2019.
Williams Scotsman expects to expand its “Ready to Work” value proposition across the ModSpace fleet and customer base, a strategy that has driven double-digit organic Adjusted EBITDA growth in Williams Scotsman’s U.S. Modular segment in recent years and proven successful in Williams Scotsman’s acquisitions of Acton Mobile and Tyson Onsite.
Until the transaction closes, both companies will operate independently and execute on their respective strategic priorities. Williams Scotsman has secured committed financing to fund the transaction, which includes an amendment and expansion of its existing revolving ABL credit facility to $1.35B with an accordion feature allowing up to $1.8B of total capacity, a $280M secured bridge credit facility, and $320M unsecured bridge credit facility.
Williams Scotsman expects the permanent financing plan to include a combination of long-term debt and equity or equity-linked securities.
WSC closed at $12.15, it last traded at $14.10.
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