WillScot Corporation (Williams Scotsman), a provider of innovative modular space and portable storage solutions across North America, is to acquire Modular Space Holdings for an enterprise value of approximately USD1.1 billion.
Williams Scotsman will indirectly acquire MS Holdings for a purchase price comprising USD1,063,750,000 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 USD15.50 per share, subject to customary adjustments. The transaction, which is subject to customary closing conditions, is expected to close in the third quarter of 2018.
ModSpace, a privately-owned provider of office trailers, portable storage units and modular buildings, had approximately USD1.1 billion of total assets as of March 31 2018. ModSpace generated USD453 million of total revenue, USD18 million of net income and USD106 million of Adjusted EBITDA for the twelve months ended 31 March 2018.2
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 USD60 million in annual cost synergies after integration, with approximately 80 per cent of the forecast synergies expected to be realised on a full run-rate basis by the end of 2019. Williams Scotsman also expects to benefit from the net operating tax loss carry-forwards to be acquired in the transaction, and for the transaction to be accretive to earnings in 2019.
Brad Soultz, President and Chief Executive Officer of Williams Scotsman, says: “ModSpace is highly complementary to our business which, when combined with Williams Scotsman, provides our shareholders with a transformational value creation opportunity. Through the combination of the best talent, practices and assets of the two companies, we expect to create an even stronger and more agile partner for our customers and vendors. We are excited about the potential to further diversify our customer end-markets, create a more balanced asset portfolio and extend our geographic footprint.”
ModSpace’s Chief Executive Officer, Charles Paquin, says: “We are excited for the opportunities the merger will create for our customers and employees. Bringing these two premier organisations together will result in a world class business capable of delivering an unparalleled customer experience.”
Soultz says: “We believe this transaction is a tremendous opportunity for our collective stakeholders, and I look forward to working with the ModSpace team to help the combined entity achieve even greater success. We will continue to execute on our strategic priorities, which remain focused on achieving measurable shareholder value creation through our organic growth initiatives and the seamless integration of ModSpace as we have done with the recent acquisitions of Acton and Tyson.”
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 (December 2017) and Tyson Onsite (January 2018).
Until the transaction closes, both companies will operate independently and execute on their respective strategic priorities.
