WillScot Corporation (Williams Scotsman), a provider of modular space and portable storage solutions across North America, announced it has entered into a definitive agreement to acquire Modular Space Holdings, Inc. (ModSpace) for an enterprise value of approximately $1.1 billion.

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 the third quarter of 2018.

ModSpace is a privately-owned provider of office trailers, portable storage units and modular buildings, had approximately $1.1 billion of total assets as of March 31, 2018.  ModSpace generated $453 million of total revenue, $18 million of net income and $106 million of Adjusted EBITDA for the twelve months ended March 31, 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 $60 million in annual cost synergies after integration, with approximately 80 percent 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.

Brad Soultz, President and Chief Executive Officer of Williams Scotsman, said, “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 CEO, Charles Paquin, said, “We are excited for the opportunities the merger will create for our customers and employees.  Bringing these two premier organizations together will result in a world class business capable of delivering an unparalleled customer experience.”  

Williams Scotsman has secured committed financing to fund the transaction, which includes (i) an amendment and expansion of its existing revolving ABL credit facility to $1.35 billion with an accordion feature allowing up to $1.8 billion of total capacity, (ii) a $280 million secured bridge credit facility, and (iii) a $320 million 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. The timing of the permanent financing is subject to a number of factors, including but not limited to market conditions.